# Economic Development (GEC)

## Title 6. Economic Development Tax Incentives

### Subtitle 4. One Maryland Economic Development Tax Credit

#### Section 6-401

(a) In this subtitle the following words have the meanings indicated.

(b) "Credit year" means the taxable year in which a qualified business entity claims the tax credit authorized under this subtitle.

(c) "Eligible economic development project" means an economic development project that:

  (1) establishes or expands a business facility within a Tier I county; and

  (2) is approved for a project tax credit in accordance with this subtitle.

(d)

  (1) "Eligible project cost" means the cost and expense a qualified business entity incurs to acquire, construct, rehabilitate, install, or equip an eligible economic development project.

  (2) "Eligible project cost" includes:

    (i) the cost of:

      (1) obligations for labor and payments made to contractors, subcontractors, builders, and suppliers;

      (2) acquiring land, rights in land, and costs incidental to acquiring land or rights in land;

      (3) contract bonds and insurance needed during the acquisition, construction, or installation of the project;

      (4) test borings, surveys, estimates, plans, specifications, preliminary investigations, environmental mitigation, supervision of construction, and other architectural and engineering services;

      (5) performing duties required by or consequent to the acquisition, construction, and installation of the project;

      (6) installing water, sewer, sewer treatment, gas, electricity, communications, railroads, and similar utilities; and

      (7) bond insurance, letters of credit, or other forms of credit enhancement or liquidity facilities;

    (ii) the interest cost before and during the acquisition, construction, installation, and equipping of the project, and for up to 2 years after project completion;

    (iii) legal, accounting, financial, printing, recording, filing, and other fees and expenses incurred to finance the project; and

    (iv) a qualified business entity's cost to furnish and equip a new location for ordinary business functions, including:

      (1) the cost of computers, nonrecurring costs of fixed telecommunications equipment, furnishings, and office equipment; and

      (2) expenditures for moving costs, separation costs, and other costs directly related to moving from outside of the State to a location in a Tier I county.

(e) "Project tax credit" means a tax credit for eligible project costs allowed under Sec. 6-403 of this subtitle.

(f) "Qualified business entity" means a person that:

  (1)

    (i) conducts or operates a trade or business in the State; or

    (ii) operates in the State and is exempt from taxation under Sec. 501(c)(3) or (4) of the Internal Revenue Code; and

  (2) is certified in accordance with this subtitle as qualifying for a project tax credit under this subtitle.

(g)

  (1) "Qualified position" means a position that:

    (i) is a full-time position and is of indefinite duration;

    (ii) pays at least 120% of the State minimum wage;

    (iii) is in a Tier I county;

    (iv) is newly created because a business facility begins or expands in one location in a Tier I county; and

    (v) is filled.

  (2) "Qualified position" does not include a position that is:

    (i) created when an employment function is shifted from an existing business facility of a business entity in the State to another business facility of the same business entity if the position is not a net new job in the State;

    (ii) created through a change in ownership of a trade or business;

    (iii) created through a consolidation, merger, or restructuring of a business entity if the position is not a net new job in the State;

    (iv) created when an employment function is contractually shifted from an existing business entity in the State to another business entity if the position is not a net new job in the State; or

    (v) filled for a period of less than 12 months.

(h)

  (1) "Tier I county" means a county with:

    (i) an average rate of unemployment for the most recent 24-month period for which data are available that exceeds 150% of the average rate of unemployment for the State during that period;

    (ii) an average rate of unemployment for the most recent 24-month period for which data are available that exceeds the average rate of unemployment for the State by at least 2 percentage points; or

    (iii) a median household income for the most recent 24-month period for which data are available that is equal to or less than 75% of the median household income for the State during that period.

  (2) "Tier I county" includes a county that:

    (i) no longer meets any of the criteria stated in paragraph (1) of this subsection; but

    (ii) has met at least one of the criteria at some time during the preceding 24-month period.

---

Md. Code Ann., Econ. Dev. (as displayed at mgaleg.maryland.gov, October 16, 2026)