Tax Credits & Incentives: Helping Frederick County Manufacturers Remain Competitive

Frederick has a rich history in manufacturing dating back to the sawmills, textile and canning factories, tanneries and grain mills of the 18th and 19th centuries. The face of Frederick’s industrial base has changed over the years – equipment manufacturing at EDCO, John Deere ride-on mowers at Wright Manufacturing, steel joists at Canam Steel, electronics manufacturing at ACDI and biologic pharmaceuticals at AstraZeneca. What has not changed is Frederick’s ideal location, skilled workforce, and supportive business environment that contribute to the industry’s success.

Through targeted programs and initiatives, OED is intentional in our support of the manufacturing industry. Here is a highlight of ways Frederick, and Maryland overall, is helping to drive growth in manufacturing:

Frederick County Commercial and Industrial Tax Credit – this local program provides a real property tax credit to manufacturers and other industrial entities that create jobs and locate new or expand an existing building in the county. The credit ranges from 10% to 100% property tax credit depending on the economic impact of the project.

Frederick County Manufacturers Roundtable -  a peer-driven organization of manufacturers that works to support existing companies with events and learning opportunities such as the Lunch, Learn and Tour series.

Frederick County On-The-Job Training – grant funding is available to support individual hires in experience-based and/or classroom based on-the-job training through a short-term wage subsidy. While this program is available to businesses across industry sectors, manufacturers find this to be a very valuable program to train new employees on the production floor.

No Frederick County Business Personal Property Tax – this is a tremendous benefit to manufacturers that can save hundreds of thousands of dollars on machinery and equipment that is often taxed in other counties and states across the country.

Maryland Single Sales Factor Apportionment for Manufacturing Corporations - Maryland’s corporate tax law provides that a manufacturer’s income tax is based solely on its percentage of in-State sales.  A single sales factor apportionment formula is used to apportion income to the State, for purposes of the corporate income tax, for “manufacturing corporations” that carry on a trade or business in and out of the State.

More Jobs for Marylanders – this state program provides a refundable state income tax credit of 5.75% of wage per new position for existing Maryland manufacturers who create 10 new jobs or more. In addition, beginning in 2018 the program will allowed for accelerated depreciation on new equipment, freeing up capital more quickly and enabling companies to reinvest in the business.

Partnership for Workforce Quality – this is a state workforce training grant targeting small and mid-sized manufacturing and technology companies. The program provides matching funds to increase the skills of existing workers for new technologies and production processes, improve employee productivity and increase employee stability.

Maryland Industrial Partnership Program - MIPS provides funding, matched by participating companies, for university-based research projects that help the companies develop new products.  The program is administered at the flagship campus at the University of Maryland, College Park, and works throughout the 12 member institutions of the University System of Maryland.

Maryland Research & Development Tax Credit – manufacturers engaged in the research and development of new products and technologies may qualify for a state income tax credit between 3-10% of their qualified R&D expenditures.

Learn more about manufacturing in Frederick County at http://www.discoverfrederickmd.com/manufacturing