Maryland offers a robust set of business incentives aimed at fostering economic development, supporting job creation, and enhancing the state’s competitive edge in industries such as technology, health care, energy, and manufacturing.  These programs provide opportunities for businesses of all sizes to benefit from tax credits, grants, and financing programs.  Below are some of the key business incentives available in Maryland.

Maryland Economic Development Assistance Authority Funds (MEDAAF)

Overview

MEDAAF provides financing to businesses and local governments to support job creation, business expansion, and infrastructure development.  MEDAAF supports various industries, including manufacturing, technology, and life sciences.

Eligibility

• Businesses must create or retain jobs in Maryland.

• Eligible industries include technology, manufacturing, and biotechnology.

• The business must demonstrate a strong economic impact in terms of job creation and investment.

Incentive Value

• Businesses can receive loans, grants, or equity investments for up to 25% of the total project cost.

• The program can cover a range of costs, including equipment, working capital, and infrastructure development.

Application Process

Businesses must apply to the Maryland Department of Commerce (MDC), providing detailed project plans, financial data, and job creation projections.

Maryland Research and Development (R&D) Tax Credit

Overview

Maryland’s R&D Tax Credit is designed to encourage businesses to invest in research and development activities.  The program provides financial incentives for companies that engage in R&D activities related to technological advancements and innovation.

Eligibility

• The credit is available to businesses that incur eligible R&D expenses in Maryland.

• R&D activities must involve the development or improvement of products, processes, or technologies.

• The credit is available to both large and small businesses.

Incentive Value

• Businesses can receive a credit of up to 3% of eligible R&D expenses.

• The credit can be applied against Maryland state income taxes.

Application Process

Businesses must file for the credit with the Maryland Department of Business and Economic Development (DBED), providing detailed documentation of R&D expenses.

Maryland Enterprise Zone Program

Overview

The Maryland Enterprise Zone Program offers state and local tax incentives to businesses that locate or expand in economically distressed areas.  The program is designed to encourage businesses to invest in and create jobs in underdeveloped areas of the state.

Eligibility

• Businesses must operate in designated Enterprise Zones in Maryland - Map

• The business must create or retain jobs in the zone and meet certain wage and investment requirements.

• The program targets industries such as manufacturing, technology, and green energy.

Incentive Value

• Businesses can receive a variety of tax incentives, including property tax credits, income tax credits, and sales tax exemptions on machinery and equipment.

• The Enterprise Zone Program provides up to 10 years of property tax credits for new investments.

Application Process

Businesses must apply through MDC and the local jurisdiction, providing evidence of job creation and investment within the designated Enterprise Zone.

Maryland Biotechnology Investment Incentive Tax Credit

Overview

The Maryland Biotechnology Investment Incentive Tax Credit is designed to support early-stage biotechnology companies.  The credit encourages investment in innovative biotech companies by offering tax relief to investors.

Eligibility

• Investors must invest in qualifying Maryland-based biotechnology companies.

• The biotech company must be engaged in research, development, and commercialization of new technologies, especially in life sciences or healthcare.

Incentive Value

• Investors can receive up to 50% of their investment as a state tax credit, with a cap of $250,000 per investor.

• The credit can be used against Maryland state income taxes.

Application Process

Investors must apply to DBED, providing documentation of their investment in the qualifying biotech company.

Maryland Job Creation Tax Credit

Overview

The Maryland Job Creation Tax Credit is designed to incentivize businesses to create new jobs in the state.  The credit is available to businesses across a variety of sectors, including manufacturing, technology, and service industries.

Eligibility

• Businesses must create a minimum number of full-time, permanent jobs within Maryland.

• The jobs created must meet certain wage thresholds, with additional benefits for hiring unemployed or underemployed workers.

• Businesses must demonstrate that the creation of these jobs would not have occurred without the tax credit.

Incentive Value

• Businesses can receive up to $5,000 per new job created in the first year.

• The credit may be increased if the business hires individuals from targeted groups, such as veterans or long-term unemployed individuals.

Application Process

Businesses must apply to DBED, providing job creation projections and wage data.

Maryland Green Jobs Tax Credit

Overview

The Maryland Green Jobs Tax Credit encourages businesses to invest in environmentally friendly initiatives, particularly in green energy and energy efficiency.  The program aims to support the growth of Maryland’s clean energy sector.

Eligibility

• Businesses must operate in the clean energy sector, such as renewable energy, energy efficiency, or green construction.

• The business must create green jobs, which are defined as jobs in energy efficiency, renewable energy, or sustainability.

Incentive Value

• Businesses can receive tax credits for creating green jobs and investing in clean energy technologies.

• The credit can cover up to 30% of eligible expenses related to clean energy projects.

Application Process

Businesses must apply to DBED, providing documentation of green job creation and the environmental impact of their projects.

Maryland Sales and Use Tax Exemption for Manufacturing Equipment

Overview

Maryland offers a sales and use tax exemption on the purchase of equipment used in manufacturing, research, and development activities.  This program reduces the cost of acquiring machinery and equipment for eligible businesses.

Eligibility

• Businesses must be engaged in manufacturing, research, or development activities.

• The equipment purchased must be directly used in the production process or in R&D.

Incentive Value

• The program provides a full exemption from sales and use taxes on qualified manufacturing equipment purchases.

• The exemption covers a wide range of machinery and equipment used in production.

Application Process

Businesses must apply for the exemption through the Maryland Department of Revenue, providing documentation of equipment purchases and business activities.

Maryland Economic Adjustment Fund (EAF)

Overview

The EAF provides financing to support businesses undergoing significant changes or expansion. The program targets businesses in industries that need assistance with capital improvements or to adjust to new market conditions.

Eligibility

• Businesses must be in need of financing to support adjustments or expansion.

• The project must have a significant impact on job creation or economic development in the state.

Incentive Value

• Businesses can receive low-interest loans or grants to cover a portion of project costs.

• The amount of assistance depends on the scope of the project and its economic impact.

Application Process

Businesses must apply to the MDC, providing detailed plans, financial data, and job creation projections.