ANNAPOLIS — The duration of a job creation tax credit program was doubled Tuesday, as legislation authorizing the credit’s extension was among the dozens of bills signed by Gov. Martin O’Malley and the presiding officers of the General Assembly.
HB 592, which was sponsored by the Del. Sheila E. Hixson, D-Montgomery, chair of the Ways and Means Committee, on behalf of the Department of Business and Economic Development. The credit was set to expire following fiscal year 2015, after 12 years. The new law extends the credit until 2027.
DBED Secretary Christian S. Johansson said the credit targets “very large development projects,” like businesses intending to move their headquarters to Maryland. Johansson said Discovery Communications’ Silver Spring headquarters was the poster project for the tax credit.
“Their investment in Silver Spring has frankly changed that community and really had a materially positive economic development impact,” Johansson said. “What we’re looking to do is make sure we have every incentive on the books [for] those thousand-plus job investments.”
The credit gives a qualifying business a $1,000 credit for each job created, as long as that business creates 60 positions in a 24-month period.
The jobs threshold drops for businesses in “priority funding areas,” which include enterprise zones, inside the Capital and Baltimore beltways, designated growth areas and incorporated municipalities.
The tax credit is available to any local jurisdiction, but has been used by Montgomery County. For businesses to qualify, a local jurisdiction has to first offer that business a property tax credit for job creation.
Though the credit’s lifespan was extended, it will be subject to General Assembly review in 2017 under legislation passed this session. The Tax Credit Evaluation Act calls for review of the eight’s costliest tax credits over a four-year period. Credits found to be ineffective could be eliminated.