Overview of Recent Amendments
L. 2022, H478 (c. 732), effective 06/01/2022 and applicable to all taxable years beginning after 12/31/2021, amends the Maryland enterprise zone program.
Key Definitions Updated
- Focus Area Employee:
An individual who earns at least 120% of the state minimum wage (previously, the requirement was 150% of the federal minimum wage). - Qualified Employee:
An individual who is hired to fill a newly created position or, if the individual is economically disadvantaged, is hired to fill a position previously held by another economically disadvantaged individual. This replaces the prior definition, which referred to an individual who is a new employee or one rehired after being laid off for more than one year by a business entity.
The amendment to the earnings requirement applicable to the Focus Area Employee definition also applies to the definition of Qualified Employee.
Additional Amendments
- Secretary of Commerce Authority:
Amendments expand the authority of the Secretary of Commerce to designate areas as enterprise zones. - Reporting Requirements:
Adjustments have been made to reporting obligations for both:- The Maryland State Department of Assessments and Taxation (SDAT)
- The Maryland Comptroller
These agencies must now report to the Maryland Department of Commerce regarding the program’s performance and compliance.
Frequently Asked Questions
What is the Maryland enterprise zone program?
The Maryland enterprise zone program provides tax incentives to businesses that create jobs and invest in designated areas. The goal is to stimulate economic development and job creation in targeted zones.
What changes were made to the definition of a Focus Area Employee?
The definition of a Focus Area Employee was updated to require that the individual earns at least 120% of the state minimum wage, replacing the older requirement of 150% of the federal minimum wage.
How has the definition of a Qualified Employee changed?
A Qualified Employee now includes individuals hired to fill new positions or, if economically disadvantaged, those filling roles previously held by another economically disadvantaged worker. This update removes the prior focus on new hires or long-term rehires.
What new authority does the Secretary of Commerce have?
The Secretary of Commerce now has expanded authority to designate enterprise zones, giving the department more flexibility in targeting areas for economic development.
What are the updated reporting requirements?
The Maryland State Department of Assessments and Taxation and the Maryland Comptroller must now report to the Department of Commerce on the program’s performance and compliance, enhancing oversight and accountability.