County Council Considering Small Business Tax Credit

Panel members discussed it during their Tues. meeting.

 

 
Frederick, Md. (KM)  A bill to set up a small business real property tax credit for Frederick County was discussed on Tuesday by the County Council.
Helen Propheter, the Director of the Office of Economic Development, says the General Assembly approved a bill in 2012 allowing Frederick County to set up such a tax credit, but it was never codified into the county tax code. “In 2015, we took the bill, and we made some modifications  to it,” says Propheter. “One of the modification was to treat all small businesses equally.”

She says the original legislation set up two different tax credits for businesses that want to expand, and those that want to relocate.  That was eliminated, says Propheter.

The new bill was approved by the General Assembly  and signed into law by the Governor. It took affect in June, 2016.

During her presentation to the Council, Propheter said one requirement in the new law requires any small business which wants to apply for the credit to hire at least five new  employees and pay them 150% of the federal minimum wage. “The federal minimum is $7.25. So what we’re asking for is for businesses to be paid $10.88 per hour to qualify for this,” she says.

Another requirement, she says, is for companies interested in taking advantage of this credit to have no more than 50 employees. They also must obtain, through purchase or lease, at least 2500 square feet of unoccupied premises for their expansions. “We didn’t want businesses moving within the county to qualify for this. We wanted true expansions and true attraction opportunities,” says Propheter.

Under this bill, qualified businesses would receive a 40% credit on their real property tax rate the first two years of the plan. In years three and four, the credit would be 30%. And in the final two years, it would be a 20% credit. A company could only take advantage of this credit for six years.

The Council took public comment on the bill on Tuesday. Only one citizen testified. Patrick Shemp of Monrovia said he supports this credit. But he called on employers to pay a “living wage.” “When you don’t pay a living wage, you’re requiring an employee to work two and three jobs to support their family,” he said. “Unfortunately, then they show up to your job and they’re even too tired to work.”

The Council made no decision on the proposed tax credit on Tuesday. A vote is expected at a later date.

 

By Kevin McManus