Financial Incentives & Legislation
FINANCIAL INCENTIVES
Created by an act of the Maryland legislature in 2002 and reinforced by a similar initiative from Baltimore City in the same year, arts & entertainment districts were intended to act as catalysts of economic development for the state’s bourgeoning creative class. To that end, certain financial incentives were introduced to encourage creative industries to cluster in areas that had been selected for their inherent friendliness to such undertakings. There are four general kinds of assistance offered under the above legislation:
1. Property Tax Credits
2.
Income Tax Relief
3. Admissions and Amusement Tax Exemption
4.
Access to the Maryland Economic Development Assistance Fund
Property Tax Credits
• The credit is prorated to reflect the proportion of a rehabbed building that is used by a resident artist or A&E enterprise.
• The amount of credit granted = the amount of property tax imposed on the eligible assessment of the property x:
80% for the 1st 5 taxable years;
70% for the 6th taxable year;
60% for the 7th taxable year;
50% for the 8th taxable year;
40% for the 9th taxable year;
30% for the 10th taxable year.
Income Tax Credit
Artists claim a tax subtraction for income derived from the sale, publication, production or performance of an artistic work that is created in the district.
How to Qualify for the Admissions and Amusement Tax Exemption
Interested enterprises must register with the Baltimore City Department of Finance, located at 469 City Hall, Baltimore, MD 21202. Telephone: 410-396-4940.
How to Qualify for the Maryland Economic Development Assistance Fund
Administered by the state’s Department of Business and Economic Development, this fund was originally approved by the General Assembly under House Bill 188 during the 1999 legislative session. The program was designed to be a non-lapsing revolving loan fund to provide below market long-term, fixed rate financing to specific growth industry sector businesses locating or expanding in priority funding areas. While there are five capabilities offered under this incentive program, the relevant one for Arts & Entertainment district purposes is found under Capability 5: Special Purpose Grants and Loans.
For more information about this program, contact Gregory J. Kosmas, our DBED area representative at:
217 East Redwood Street, 10th floor
Baltimore, MD21202
Teephonel: 410-767-3949
ENABLING LEGISLATION
Annotated Code of Maryland Article 83A (PDF). Department of Business and Economic Development Title 4. Division of Tourism, Film and the Arts Subtitle 7-Arts and Entertainment Districts
AN ORDINANCE CONCERNING Arts and Entertainment Districts (PDF)- Property Tax Credits - Admissions and Amusement Tax Exemptions (Baltimore City)
Title 24 DEPARTMENT OF BUSINESS AND ECONOMIC DEVELOPMENT,
Subtitle 05 ECONOMIC DEVELOPMENT
Chapter 26 Arts and Entertainment Districts (PDF) - describes the procedures that will be used by the Secretary of Business and Economic Development to designate arts and entertainment districts.