With the 2013 legislative session in full swing in Maryland, many lawmakers are focusing on making changes to aid businesses in the state. Thus far, a number of bills have been proposed that would change the corporate income tax rate and affect tax credits for businesses in certain areas.
In addition, a House committee has been established with the express purpose of improving the economy in the state, specifically by enhancing the business climate in Maryland. The committee will reportedly focus on a number of areas, including:
- Ways to limit bureaucratic holdups for businesses
- Types of businesses that could use additional investments from the private sector
- Methods to increase investments in Maryland’s infrastructure
These changes could lead to even more advantages for businesses already established — or new businesses considering forming — in Maryland.
Bill would lower Maryland’s corporate income tax rate
Two legislators in Maryland have proposed a bill that would lower Maryland’s corporate income tax rate, from 8.25 percent to 6 percent. The lawmakers believe lowering the rate to levels at or below neighboring states would lead to an increase in business in Maryland. Currently, Virginia’s corporate tax rate if 6 percent and North Carolina’s is 6.9 percent.
The legislators have stated that the lowered corporate income tax rate would likely result in more businesses relocating to Maryland, which would lead to an increase in available jobs in the state. In addition, the Maryland Chamber of Commerce believes the bill would result in businesses already established in Maryland hiring more workers and increasing their production.
Similar bills have been proposed in recent sessions, but have been unsuccessful. In 2012, a proposed bill lowering the corporate tax rate to 7 percent never made it out of committee. In 2011, a proposed bill lowering the rate to 6 percent never received a hearing.
Legislators are hopeful that the proposed bill this year will gain more traction than in previous years.
Proposed changes to tax credits for Maryland businesses
In addition to the proposed lower corporate income tax rate, Maryland legislators have introduced a number of bills that would provide tax credits to certain industries in Maryland.
For instance, the “Build Maryland Tax Credit Act,” would provide around $4 million annually in tax credits to commercial real estate developers. Legislators believe the tax credit would generate sufficient economic growth and employment possibilities to justify the credit.
Lawmakers have proposed a bill to triple the tax credit set aside for research and development in Maryland. Governor O’Malley has also suggested tax credits be established or increased for cyber security companies and biotech firms in the state.
If you are considering establishing or relocating a business in Maryland, consulting with a skilled, Maryland business law attorney will ensure the future of your business is protected.