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Tax Credit Information

The State of Maryland and Washington County offers a variety of tax credit programs. Click on the headings below for information. For referral information on the various tax credit programs, please contact the Washington County Treasurer’s Office at 240-313-2110.

AVAILABLE TAX CREDITS IN WASHINGTON COUNTY, MD

Agricultural Preservation Tax Credit

This tax credit may be granted against the amount of Washington County real property taxes based upon the assessed value of qualified land and improvements. Property owners must commit to remain in agricultural related pursuits for a period of ten years. The property must be located within a designated agricultural preservation district.

The credit shall be allowed for the tax year immediately following application and approval. For information, please contact the Washington County Planning Department at (240) 313-2430.

Enterprise Zones

This program provides qualifying businesses with State income tax credits and local real property tax credits in return for job creation and capital investments made in the designated Enterprise Zone(s).

Approximately 5,910 acres in Washington County, MD are within two (2) state-designated Enterprise Zones; the Hagerstown-Washington County, MD Enterprise Zone and the Town of Hancock, MD Enterprise Zone. The Hagerstown-Washington County, MD Enterprise Zone encompasses approximately 4,410 acres located within the City of Hagerstown. The Town of Hancock, MD Enterprise Zone is comprised of 1,500 acres surrounding the Town of Hancock.

Local and state incentives are available to new or expanding businesses in these zones to promote growth of the industrial and commercial base. Each Enterprise Zone is approved by the State for a ten-year period.

Qualifying businesses may be eligible for local real property tax credits for up to ten (10) years on capital investments. Credits of 80% on the increased assessed value of real property for the first five (5) years, decreasing by ten percent (10%) in each remaining five (5) years.

This program is administered by the Washington County, MD Department of Business Development.

Click here for a complete Enterprise Zone Information and Application packet.

Foreign Trade Zone Benefits

Nearly 1,800 acres of prime industrial and commercial properties are located within the Washington County, MD Foreign Trade Zone (FTZ) #255. Buildings and sites are available for development with an array of am amenities including rail, airport runway access, superior interstate visibility, municipal water and sewer, and natural gas.

Imports may enter and be held in an FTZ without Customs duties. Duty is paid only when those imports are shipped into U.S. Customs territory.

Customs duties are not paid on merchandise re-exported from an FTZ,
Duties are not owed on labor, overhead or profit attributed to FTZ production operations,
FTZ user can pay the duty rate on component material or merchandising produced from component material or merchandising produced from component material, whichever is lower,
No duty is owned on inbound zone-to-zone transfer of FTZ merchandise,
Tangible personal property held in an FTZ for export is not subject to state and local taxes and ad valorem taxes,
Materials used and/or consumed in FTZ processing are generally not subject to duties.

This program is administered by the Washington County, MD Department of Business Development.

Additional Foreign Trade Zone Resources:

National Association of Foreign Trade Zones – naftz.org
S. Department of Commerce – www.commerce.gov
S. Customs and Border Protection – www.cbp.gov/trade

High Performance Commercial Building Tax Incentive Program

This program is a three (3) year tax credit program for the construction of new or renovated space that achieves LEED Platinum, Gold, or Silver certification. The credit shall be applied only again the increase assessed value of a property as determined by the Maryland State Department of Assessments and Taxation. The amount of the credit shall be 30% of the increase for Platinum, 25% of the increase for Gold, and 20% of the increase for Silver.

This program is administered by the Washington County, MD Department of Business Development.

Click here for a High Performance Commercial Building Tax Incentive Program Information and Application packet.

Historic Preservation Tax Credit

This tax credit may be granted against the amount of County real property taxes, based upon the amount expended by a taxpayer for restoration or preservation of an historic property. A property must be an historic site designated on the master plan for historic preservation, or within a historic district designated on the master plan for historic preservation. The tax credit shall be in an amount equal to ten percent (10%) of the owner’s expense for certain restoration and preservation of any existing structure up to the total amount of County real estate property taxes. A credit of five percent (5%) of the owner’s expense shall be allowed for new construction attached to an existing historic structure.

The credit shall be allowed for the tax year immediately following the work or any portion thereof is completed, and any unused portion of this tax credit, may be carried forward for as many as 5 tax years, after which the credit lapses.

For information, please contact the Washington County Planning Department at (240) 313-2430 or view our Historic Preservation Tax Credit virtual brochure.

Homeowner's Property Tax Credit

Maryland’s Homeowners Property Tax Credit program is administered by the State of Maryland and tax credits are granted to eligible homeowners of all ages. Applications for this program must be filed by September 1, of each year. The program provides tax credits for homeowners who qualify on the basis of their household income in relation to the total property tax obligation.

Homeowner’s Credits are displayed on the tax bills. The amount of the credit will appear on the bill and reduces the tax amount due. If the credit is issued after the taxes are paid, a refund will automatically be made to the taxpayer. If you are anticipating a tax credit, but it has not been granted as of the due date of your taxes, property owners should pay the taxes in full to avoid interest and penalties.

For further information or to request an application form, contact the Maryland State Department of Assessments & Taxation at 1-800-944-7403, or visit their website at www.dat.state.md.us.

Homestead Property Tax Credit

To assist homeowners who are impacted by large assessment increases, the State of Maryland, Washington County, and municipalities limit the annual taxable assessment increase for owner-occupied residential properties. This homestead tax credit is administered by the State and is automatically applied to all properties listed as “Principal Residence”. The Homestead Tax Credit rates are as follows:

State of Maryland – 10%
Washington County – 5%
Municipalities – 5%

If you are eligible but did not receive the credit or wish to learn more about the program, please contact the Maryland State Department of Assessments & Taxation at 301-791-3050 or visit their website at www.dat.state.md.us.

Job Creation and Capital Investment Real Property Tax Credit

This tax credit program ranges from six (6) years to fifteen (15) years in tax credits on the County portion of real estate taxes for qualified businesses that either expand or locate and increase employment in Washington County. There are three (3) opportunities available:

Section 4(a) – An existing business entity (1) must obtain at least an additional 1,500 square feet of new or expanded premises; (2) must employ at least one (1) individual in a new, permanent full-time position during a 12-month period during which the business entity must obtain and occupy the new or expanded premises. The tax credit is 52% during years one (1) and two (2); 39% during years three (3) and four (4); and 26% during years five (5) and six (6).
Section 4(b) – (1) Must obtain at least 2,500 square feet; (2) employ at least five (5) additional new, permanent full-time employees during a 24-month period. The tax credit is 30% during years one (1) and two (2); 20% during years three (3) and four (4); and 10% during years five (5) and six (6).
Section 4(c) – (1) Must invest $10,000,000 in capital improvements; (2) create 100 new, permanent full-time employees. Tax credit is 100% for each of the first five (5) taxable years; 75% for years six (6) through ten (1); 50% for years 11 through 15.

This program is administered by the Washington County, MD Department of Business Development.

Click here for a Job Creation and Capital Investment Real Property Tax Credit Program Information and Application packet.

New Jobs Tax Credit Program

This program provides a six (6) year tax credit for qualified businesses that either expand or relocate in Washington County, MD. The credit applies to Washington County, MD’s real property tax on real property owned or leased by the business and on personal property owned by that business. The amount of the New Jobs Tax Credit a business may claim against County taxes imposed on the assessed value of the new or expanded premises in which the credit is allowed is:

52% during the first and second taxable years,
39% during the third (3^rd) and fourth (4^th) taxable years,
26% during the fifth (5^th) and sixth (6^th) taxable years.

To qualify for this program, a business must:

Either construct or expand its operations in Washington County, MD by a minimum of 10,000 square feet,
Employ at least 25 persons in new, permanent full-time positions located at the new or expanded premises in Washington County,
Pay 50% of those new jobs at least 135% of the average weekly wage per Washington County, MD worker as reported by the Maryland Department of Labor at the end of the previous calendar year, and,
Be in a Priority Funding Area as designated in Title 5, Subtitle 7B of the State Finance and Procurement Article.

This program is administered by the Washington County, MD Department of Business Development.

Click here for a New Jobs Tax Credit Program Information and Application packet.

Pad-Ready Site Commercial Stimulus Program

A commercial property stimulus program that offers a qualified project a three (3) year tax credit against the County real property tax on four-tenths of one (1) percent (0.004) of construction costs of the new improvement on the approved parcel.

This program is a valued part of our local business incentive package and considered integral in spurring economic growth in Washington County, MD.

Qualifying projects are entitled to priority plan review by the Washington County, MD Development Advisory Committee (DAC), deferral of County Site Plan application and review fees and a real estate tax credit issuance once buildings are constructed and occupied.

This program is administered by the Washington County, MD Department of Business Development.

Click here for a Pad-Ready Site Commercial Stimulus Program overview and application packet.

Property Tax Exemptions

There are numerous types of Property Tax Exemptions available through the State, some of the most used include exemptions for: charitable or educational properties; dwelling house of blind individual, surviving spouse; dwelling house of disabled veteran, surviving spouse; government properties; and properties owned by religious organizations.

For a full list of available exemptions, please reference The Annotated Code of Maryland Tax Property Article Title 7, Subtitle 2. General Property Tax Exemptions as follows:

7-201. Cemeteries and mausoleum companies.
7-202. Charitable or educational purposes.
7-203. Chesapeake Bay Foundation.
7-204. Religious groups or organizations.
7-205. Community water systems.
7-206. Continuing care facility for aged.
7-207. Dwelling house of blind individual; surviving spouse.
7-208. Dwelling house of disabled veteran; surviving spouse.
7-209. Fire companies and rescue squads.
7-210. Government property.
7-211. Interest in government property.
7-211.1. Property used to heat, cool, or generate electricity for State.
7-212. Gunpowder youth camps.
7-214. Historical societies; war memorials.
7-215. Housing authority property.
7-216. Izaak Walton League.
7-217. Maryland Ornithological Society, Inc.
7-218. Nature Conservancy.
7-219. Personal property – Agricultural products.
7-220. Same – Aircraft.
7-221. Same – Bank property.
7-221.1. Same – Property used in processing deposits or loans.
7-222. Same – Business stock property.
7-223. Same – Farm implement property.
7-224. Same – Livestock property.
7-225. Same – Manufacturing property.
7-226. Same – Raw materials and products property.
7-227. Same – Property located in a residence.
7-228. Same – Savings and loan property.
7-229. Same – Tools of mechanics or artisans.
7-230. Same – Vehicles.
7-231. Same – Vessels.
7-232. Same – Voting system.
7-233. Scouts.
7-234. Veterans’ organizations.
7-235. Maryland Vending Program for the Blind.
7-236. Refueling equipment or machinery.
7-237. Machinery or equipment used to generate electricity, steam for sale, hot or chilled water for sale.
7-238. Computer software and related documentation.
7-239. Certified coal pollution control facility; coal waste disposal power project.
7-240. Property of nonprofit organization engaged in containment of coastal and tidal oil spills.
7-241. Charles County Planning Commission.
Subtitle 3. State Property Tax Exemption.
7-301. Personal property – State property tax exemption.
7-302. American Association of Blood Banks, Inc.
7-303. Licensed public airport on privately owned land.
7-304. Land trusts.
7-305. Harford Land Trust.
7-401. Rolling stock property

Senior Citizen Supplement - Homeowners Property Tax Credit

Resolution – RS-2012-08 (pdf)

Effective July 1, 2012, the Washington County Board of County Commissioners voted to ease the tax burden on homeowners age 65 and over that meet certain income qualifications. The credit applies to homeowner occupied residential properties, and supplements the State Homeowners’ Property Tax Credit program. Residents may apply by using the State’s Homeowners’ Property Tax Credit Application Form HTC-60. This form is used to determine eligibility for both the Washington County credit as well as the State of Maryland credit. The application will be processed and eligibility will be determined by the State Department of Assessments and Taxation.

The tax credit is based upon the amount by which the State of Maryland and Washington County real property taxes exceed a percentage of the homeowners’ combined income. Under the State of Maryland formula, the first $8,000 of income is excluded from the calculation. Washington County’s Senior Citizen supplemental tax credit may significantly increase the overall tax credit.

Veterans Tax Credit

Ordinance – ORD-2018-13
Application Form

Washington County homeowners classified as 1% – 100% service-connected disabled American veterans (and surviving spouses) may be eligible for real estate property tax credit. For additional information on this program please call the State of Maryland Department of Veterans Affairs at 301-791-0356.

Click here for more information regarding these and other incentive programs offered in Washington County, MD.

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