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Enterprise Zone Tax Credits

The City of Cambridge has one of the two Enterprise Zones located within Dorchester County. Businesses locating in a Maryland Enterprise Zone may be eligible for income tax credits in return for job creation; and real property tax credits for investing in capital enhancements made in the zone.

One Maryland Tax Credit

Businesses that invest in an economic development project in a "qualified distressed county", such as Dorchester, may qualify for project tax credits of up to $5 million and start-up tax credits of up to $500,000 under the One Maryland Income Tax Credit Program.

In order to claim the One Maryland project and start-up tax credits, a business entity must meet the following requirements:

HUB Zone

The Historically Underutilized Business Zone (HUB Zone) Empowerment Contracting Program is designed to stimulate economic development and create jobs in urban and rural communities by providing federal contracting preferences to small businesses. These businesses can obtain HUB Zone certification in part by employing staff or workers from a geographical area designated as a HUB Zone such as Cambridge. For more information go to: www.sba.gov/hubzone

Maryland Job Creation Tax Credit

Maryland's Job Creation Tax Credit program provides income tax credits to businesses that create new jobs to encourage them to expand or relocate in Maryland.

Calculating the Credit

In most cases, the credit is 2.5 percent of annual wages for all newly created, full-time jobs, subject to a limit of $1,000 per new job. In a state enterprise zone, a federal empowerment zone, or a Maryland Department of Housing and Community Development designated neighborhood, the credit is increased to five percent of annual wages for all newly created full-time jobs, subject to a limit of $1,500 per new job. The credit earned by a qualified business entity may not exceed $1 million per credit year.

If the credit is more than the tax liability the unused credit may be carried forward for five years following the credit year. The credit may be recaptured if the business experiences job losses.

Job Creation Tax Credit Priority Funding Areas

A business that locates or expands in a “Priority Funding Area” must only create a minimum of 25 new positions to qualify for the Job Creation Tax Credit. A “priority funding area” is defined for the purposes of the Job Creation Tax Credit as: