Tax Credits

Frederick County and the State of Maryland have several targeted incentive programs designed to encourage new business, business growth and job creation. We welcome the opportunity to discuss your project with you.

Frederick County Small Business Tax Credit

Businesses who obtain at least 2,500 square feet of new or expanded premises and employ at least five people in full-time jobs during a 24-month period in the same time period, may be eligible for a Small Business Tax Credit. Download Small Business Tax Credit.pdf.

The exemption schedule is as follows: 40% in the 1st and 2nd taxable years, 30% in the 3rd and 4th taxable years, 20% in the 5th and 6th taxable years and 0% for each table year thereafter.

Frederick County New Jobs Tax Credit

Businesses who construct or expand by at least 5,000 square feet in a priority funding area and create at least 25 full time jobs within the first two years of expansion may qualify for a New Jobs Tax Credit.  An Enhanced New Jobs Tax Credit is available for businesses who expand by at least 250,000 SF at a minimum number of new jobs. These tax credits are available for new construction only. Download New Jobs Tax Credit.pdf and Download Enhanced New Jobs Tax Credit.pdf. The application can be accessed here.  

The Exemption Schedule for both options is the same: 52% for the 1st and 2nd taxable year, 39% in the 3rd and 4th taxable year, 26% in the 5th and 6th taxable year and 0% for each taxable year after year 6.

Frederick County Commercial and Industrial Business Tax Credit

Businesses conducting manufacturing, fabricating, or assembling operations with a total new investment of at least $5M and at least 25 new jobs paying at least 150% of the federal minimum wage may be eligible for a 10-year real property tax credit. To download an information sheet, please click Commercial and Industrial Business Tax Credit.pdf.

State of Maryland Tax Credits

There are several tax credits and incentives through the Maryland Department of Commerce for various activities and industries.

Redevelopment Incentives

Rehabilitated Vacant Commercial Structures Property Tax Credit creates an incentive for vacant structure rehabilitation and capital investment in existing infrastructure for eligible properties. Criteria for the program includes: properties must have been vacant for at least 18 of the last 24 months; properties must be used for non-residential purposes located in an area permitting commercial or industrial use; and the structure must have been constructed prior to the year 2000. For more information and to download an application, please view the Vacant Commercial Tax Credit Application or Download Rehabilitated Vacant Commercial Structures Tax Credit.pdf

Historic District Tax Credits are available at the City, County, State and Federal level. The Frederick County Historic District Tax Credit was enacted in 1975 and revised in 1990. It provides a five-year decreasing credit on improvements made to existing structures within the historic district. It has helped redevelopment of residential and commercial properties downtown. The Downtown Property Rehabilitation Tax Credit is a City of Frederick program that awards tax credits for the 40 blocks designated as Downtown Frederick. The Maryland Competitive Commercial Tax Credit through the Maryland Historical Trust, provides a 20% credit against Maryland income taxes if investment in property exceeds cost of property. The Federal Historic Preservation Tax Incentive is administered by the National Park Service and 20% federal income tax credit, based on the renovation of a certifed historic structure. 

City of Brunswick Enterprise Zone is a state-designated program designed to help promote growth within the 1,371 acres inside city limits. Enterprise Zone incentives available to qualifying businesses are: local and real property tax credits for up to 10 years on capital investment and state income tax credits for creating new jobs. The credit is a one-time maximum of $1,000 for newly created positions. Download Brunswick Enterprise Zone.pdf 

Golden Mile Tax Credit & Arts and Entertainment Tax Credit, are State/County and City of Frederick tax credits that provides decreasing tax abatement on building improvements for 7 years for rehabilitation of existing structures located along Route 40 West, the traditional retail corridor in Frederick as well as the Downtown Frederick Arts & Entertainment District. For more information, please click here

Main Street Maryland Program Incentives – The Main Street Maryland designation is earned through a competitive process that highlights a five-point approach incorporating design, local organization, promotion, economic development and sustainability. Frederick County has five designated Main Street Communities: Downtown Frederick, Brunswick, Middletown, Mt. Airy and Thurmont. Businesses located in Main Streets may be eligible for facade improvement grants and other local incentives.

Brownfields Revitalization and Incentives –  For five years after cleanup, a site may qualify for a real property tax credit from the City and County between 50% and 70% of the increased value of the site. For more information, please click here.