Hearings Set in Annapolis for Property Tax Credit Bill

A bill that would give St. Mary’s County the authority to waive a business’ property taxes for up to 10 years will get committee hearings at 1 pm March 30 in the Maryland House of Delegates and 1 pm March 31 in the Senate.

Delegates Deborah Rey, Matt Morgan, and Anthony O’Donnell introduced House Bill 0917, “St. Mary’s County – Property Tax Credit – New and Expanding Businesses,” to enable the St. Mary’s County commissioners and the Leonardtown Council to attract more business to their jurisdictions with property tax credits. Sen. Steve Waugh cross filed SB 0998 in the Maryland Senate.

According to the bill’s fiscal summary, “St. Mary’s County property tax revenues decrease beginning in FY 2017 to the extent the property tax credit is granted. The amount of the decrease depends on the number of businesses receiving the property tax credit and the value of the property owned by these businesses.”

The bill has the potential to be “meaningful” for local small businesses. Simply put, “Small businesses that qualify for the property tax credit will pay less in property taxes,” the summary states.

Several counties are authorized to establish property tax credits for new or expanding businesses including Calvert, Charles, Frederick, Garrett, Harford, Howard, Queen Anne’s, Talbot, and Washington.

The recently adopted Lexington Park Master Plan emphasizes the need to draw new business into the section of the county designed to accommodate business growth. Increasing the local capabilities to incentivize locating in Lexington Park is a central piece of the master plan’s Section 6 regarding the economic development needs of Lexington Park. The assessed property value of the 8th District, which includes some of the more residential areas bordering Lexington Park, grew to $90 million in the 10 year growth surge associated with NAVAIR’s headquarters moving to Naval Air Station Patuxent River. This tax base has fallen nearly 20 percent in the past five years.

The St. Mary’s County Economic Development Commission, a volunteer board serving at the invitation of the county commissioners, is charged with identifying those industries targeted for expansion. The bill stipulates that the business expansion or new company must employ 10 people.

“The EDC has been tasked with developing a plan to broaden the local economy while also protecting our largest employer – NAS Patuxent River,” reports the St. Mary’s County Business Development e-Newsletter. “The economic incentive proposed by this legislation creates a meaningful tool for achieving this important goal.”

If approved by both houses in the 2016 Legislative Session and signed into law by Governor Larry Hogan, this will apply to all taxable years following June 30, 2016, and will authorize St. Mary’s County government and the town of Leonardtown to grant a property tax credit against the tax imposed on property owned or leased by new or expanding businesses for up to 10 years. This incentive will allow St. Mary’s County to help local businesses expand and far more competitive when attracting businesses that meet the county’s objective of diversifying the local economy.

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