For Immediate Release: Tuesday, June 28, 2016
The Montgomery County Council today unanimously approved Expedited Bill 21-16 that will provide personal property tax credits in the Burtonsville Crossroads Neighborhood Plan area as an incentive to stimulate business growth. The lead sponsor of the bill was Councilmember Tom Hucker. Councilmembers Marc Elrich and Nancy Navarro were co-sponsors.
Personal property tax credit for
Burtonsville Crossroads Neighborhood
approved by Montgomery Council
Approval of bill, sponsored by Tom Hucker, is
another step toward stimulating East County business
ROCKVILLE, Md., June 28, 2016—The Montgomery County Council today unanimously approved Expedited Bill 21-16 that will provide personal property tax credits in the Burtonsville Crossroads Neighborhood Plan area as an incentive to stimulate business growth. The lead sponsor of the bill was Councilmember Tom Hucker. Councilmembers Marc Elrich and Nancy Navarro were co-sponsors.
“This is only the first step toward creating jobs and much needed investment in this underserved area of the County,” Councilmember Hucker said. “In addition, I am working with the District 14 Delegation and the Maryland Department of Commerce to establish a State Enterprise Zone in Burtonsville. Between these local and state tax credits, I am confident that we will soon achieve our vision for East County.”
State Senator Craig Zucker, who represents Burtonsville, said: “I am proud to be working with my District 14 teammates and Councilmember Hucker to create the conditions for Burtonsville to have a sustainable, vibrant town center.”
Bill 21-16 will allow a property tax credit for certain personal property owned by certain business entities located in the Burtonsville Crossroads Neighborhood Plan. The legislation is part of the Council’s overall plan to increase business development in the East County area, with the further intent of having the State approve Burtonsville as a Maryland Enterprise Zone.
The Maryland Enterprise Zone Program is a local economic development program that gives local governments the legal authority to offer economic incentives, including real property and income tax credits. In order to establish an Enterprise Zone, the local government must apply to the Maryland Department of Business and Economic Development.
“In 2013, the Montgomery County State Delegation passed enabling legislation that allows the County to enact real property and personal property tax credits for businesses located in the area covered by the Burtonsville Crossroads Neighborhood Plan,” Councilmember Hucker wrote to his fellow Councilmembers in a memo in May to explain why he was introducing the bill. “Later that year, the Council passed Bill 30-13 to allow only the real property portion of the tax credits for businesses that improve their property by Jan. 1, 2020.
“According to County staff, however, no businesses have taken advantage of this tax incentive because there has been little to no development in Burtonsville. That is why I am introducing Council Bill 21-16 to enact the personal property tax credits. While real property tax credits mainly benefit developers and property owners, personal property tax credits have the potential to benefit small businesses that invest in our community.”
The real property tax credit is provided against local real property taxes on a portion of real property expansion, renovation or capital improvement. The amount of credit is 80 percent of the eligible assessment in each of the first five years, and the credit decreases 10 percent annually for the subsequent five years.
Montgomery County currently has four approved Enterprise Zones. They are Old Town Gaithersburg (expires 2018), Glenmont (expires 2023), Long Branch Takoma Park (expires 2023) and Wheaton (expires 2018).
There are two types of income tax credits for businesses in an Enterprise Zone. The first is the one-time general income tax credit of $1,000 for each qualified new employee filing a newly created position in an enterprise zone. The second is the income tax credit for economically disadvantaged employees, which begins at $3,000 for each qualified new economically disadvantaged employee and decreases by $1,000 each year.
Businesses located in “Focus Areas” also may be qualified for personal property tax credits on new investment in personal property and enhanced income tax credit for creating new jobs.
In Maryland there is a tax on business owned personal property which is imposed and collected by local governments. Personal property generally includes furniture, fixtures, office and industrial equipment, machinery, tools, supplies, inventory, and any other property not classified as real property. Personal property taxes are assessed value of the property, which is calculated as the original cost of the property minus any annual depreciation allowance.
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Release ID: 16-207