Overview of City and County Tax Credits - The City of Frederick encourages rehabilitation, capital investment, and job creation through various tax credit programs and incentives.
- Vacant Commercial Property Tax Credit (City & County) – The Vacant Commercial Tax Credit encourages properties to be rehabilitated and placed back into active use. All commercial properties that have been vacant and marketed for at least 18 of the last 24 months prior to the start of rehabilitation are eligible for the tax credit. This rehabilitative tax credit can be claimed for 7 years. See the chart below for additional details and an example of the tax savings. Download Application (PDF).
- Golden Mile Property Tax Credit (City & County) - The Golden Mile Property Tax Credit encourages commercial rehabilitation within the designated Golden Mile revitalization district. Any property located within this district qualifies for the tax credit, provided that the rehabilitation increases the value of the property. This rehabilitative tax credit can be claimed for 7 years. See the chart below for additional details and an example of the tax savings. Download Application (PDF).
- Downtown Frederick Historic Rehabilitation Tax Credits (City & County) – Properties located within the Historic District may be eligible for tax credits on both City and County real property taxes. For additional information and eligibility requirements, contact the City’s Historic Preservation Department.
- Business Personal Property (City & County) - Frederick County does not assess a business personal property tax. In 2015, The City of Frederick adopted a 10-year phase-out of the business personal property tax. In FY 2017, non-manufacturing personal property is automatically 70% exempt and manufacturing personal property is automatically 82% exempt. The exemptions will increase each year until 2025 when the business personal property tax will no longer be assessed. Additionally, manufacturers that have acquired new business personal property after January 1, 2015 may be eligible for a 100% tax credit. For complete details, contact the Department of Economic Development at 301-600-6360.
- High Performance Building Tax Credit (City) - In order to encourage the construction of energy efficient and sustainable building, the City of Frederick provides a High Performance Building Tax Credit for LEED certified (or equivalent) buildings. For additional information and to apply for the credit, contact the City Planning Department at 301-600-1499. Download Application (PDF).
- Arts & Entertainment District Tax Credit (City & County) - Downtown Frederick is a Maryland Arts & Entertainment District. The A&E District offers several incentives for arts organizations and property owners, including an A&E Property Tax Credit, an Artist Income Tax Credit, and the abatement of the A&E tax for qualified arts and entertainment establishments. For additional details on the program, visit the Downtown Frederick Partnership's website.
- New Jobs Tax Credit (City & County) – Both Frederick City and County offer a New Jobs Tax Credit for businesses that construct 5,000 SFT in new or expanded facilities AND create 25 net new full-time jobs over a 24 month period. The Maryland State Department of Assessments and Taxation determines the value of the new or expanded facility. Based on this value, the credit applies over 6-years as follows: 52% Credit (Years 1 and 2), 39% Credit (Years 3 and 4), 26% (Years 5 and 6). Note that a letter of intent must be completed prior to the start of hiring or the start of construction. Applicants that qualify for the City and County credit may also qualify for a State income tax credit. Download Application (PDF).
- Commercial & Industrial (Manufacturing) Tax Credit – The Commercial & Industrial Tax Credit provides a credit on real property taxes for manufacturers making new investments totaling at least $100,000 AND adding at least 3 net new full-time jobs. The tax credit can be claimed for up to 10-years and provides a tax credit of 20% to 100% of the incremental tax increase attributable to the new investment as determined by the Maryland State Department of Assessments and Taxation.
- With the exception of the New Jobs Tax Credit, tax credit applicants do not need to apply until after the rehabilitation or project is complete. Once the project is complete, the Department of Economic Development will work with the applicant to claim the most advantageous tax credit program available.
- Tax credit applications must be received by April 30th in order to receive credit for July 1 tax bill
- A new tax credit application must be submitted each fiscal year
- Rehabilitative tax credits (including Vacant Commercial & Golden Mile) provide a 7-year phase-in. The increased assessed value used for the calculation of the tax credit is determined by the Maryland State Department of Assessments and Taxation (SDAT). Once the project is complete, the property will be reassessed in value. Once this number is available, a property owner may apply for the tax credit. The tax credit will be provided on the increased value of the property attributed to the completed work, as determined by SDAT. Based on this figure, the tax credit is calculated as follows:
Example: If a property was originally assessed at $200,000 prior to the completion of a $100,000 rehabilitation, the rehabilitative tax credit would result in $8,340.00 of total property tax relief over the 7-year period (based on FY2017 Frederick City and County property tax rates.Additional Finance & Incentive Programs:
- Small Commercial Tax Credit - The Maryland Historical Trust offers a small commercial tax credit for rehabilitation projects under $500,000. The income tax credit is equal to 20% of qualified rehabilitation expenditures.
- Downtown Frederick Facade Improvement Program - In partnership with the Downtown Frederick Partnership and the Maryland Department of Housing and Community Development, eligible businesses may receive a 1:1 match on qualified exterior facade improvements. For details, contact the Downtown Frederick Partnership at 301-698-8118.
- Golden Mile Facade Improvement Program - In partnership with the Golden Mile Alliance and the Maryland Department of Housing and Community Development, eligible businesses may receive a 1:1 match on qualified exterior facade improvements. For details, contact the Golden Mile Alliance at email@example.com.
- East Frederick Facade Improvement Program - In partnership with East Frederick Rising and the Maryland Department of Housing and Community Development, eligible businesses may receive a 1:1 match on qualified exterior facade improvements. For details, contact the Department of Economic Development at 301-600-6360.
- State of Maryland Finance Programs - The Maryland Department of Commerce offers numerous finance programs and tax credits for businesses. For specific questions on Department of Commerce programs, contact Tamar Osterman, Senior Business Development Representative, at 443-902-4487 or firstname.lastname@example.org.
- Maryland Venture Fund - The Maryland Venture Fund (MVF) provides seed and early-stage investments in innovative companies across numerous industry sectors, including cybersecurity, software, communications, healthcare IT, and more. Contact the MVF for more information.
- Neighborhood BusinessWorks Program - The Maryland Department of Housing and Community Development (DHCD) provides gap financing to new and expanding small businesses and non-profit organizations. Loan amounts up to $500,000 or 50% of total project cost, whichever is less.