It’s that time of year again, Maryland! Here’s everything you need to know about Maryland business tax credits and incentives for the 2017 filing season.
Who Must File
All corporations and associations with income allocable to the State of Maryland are required to file an income tax return with the state on Form 500. The corporate tax rate is 8.25% of the net income allocable to Maryland.
When and How to File
Business income tax returns for the year 2017 must be filed by April 18 (the first weekday after April 15 following the close of the taxable year or period) or by the original due date required for filing the federal return. Form 500 must be filed electronically to claim business income tax credits.
Business Personal Property and Local Taxation Requirements
In Maryland, businesses must pay an annual tax based on the value of their business personal property, including furniture, fixtures, tools, machinery, equipment, etc. The state Department of Assessments and Taxation (DAT) administers the valuation process, however individual counties and towns collect the tax based on the location of the property.
The DAT automatically registers corporations, limited liability companies, limited partnerships and limited liability partnerships for this tax when these legal entities form. All other businesses, such as sole proprietorships and general partnerships, that own or lease personal property or need a business license are required to:
1) Obtain an identification number by registering with the DAT; and
2) File an annual business personal property return.
Tax credits provide new and existing businesses in various industries and geographic locations the opportunity to reduce costs, spur investment and create jobs through targeted tax incentives. There are two new business tax credits available for the 2017 filing season:
Aerospace, Electronics, or Defense Contract Tax Credit: Businesses or individuals who operate an Aerospace, Electronics, or Defense Contract Tax Credit Project may be eligible for an income tax credit. The income tax credit is based on the number of qualified positions created or retained for an Aerospace, Electronics, or Defense Contract Tax Credit Project. The maximum credit amount is $2,500,000 per Aerospace, Electronics, or Defense Contract Tax Credit Project.
Preservation and Conservation Easements Tax Credit: Individuals or members of a Pass-Through Entity (PTE) may be eligible for a credit for an easement conveyed to the Maryland Environmental Trust, the Maryland Agricultural Land Preservation Foundation, or the Maryland Department of Natural Resources to preserve open space, natural resources, agriculture, forest land, watersheds, significant ecosystems, viewsheds or historic properties if:
Four business tax credits have been modified for the 2017 filing season:
Maryland offers a variety of tax incentives, exemptions and credits to help businesses grow and prosper, including:
In addition to the listed tax incentives and credits, Maryland offers the following benefits:
Maryland also offers specialized financing and incentive resources for small businesses, veteran-owned businesses and minority- and woman-owned businesses to help with a variety of needs including:
If you would like additional information about Maryland business taxes, visit Maryland Business Taxes or the Maryland Department of Business & Economic Development.
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