• Home
  • Links
  • Contact Us
A A A
Follow us

Incentives

The Business Development Division is responsible for the retention, expansion and attraction of businesses to the county. The division's goal is to meet the business community's needs. The Business Development Division pursues and contacts business prospects that are expanding, moving within the county, or relocating to the county from another jurisdiction. In doing so, the division ascertains the needs of each business and structures an incentive package to meet its requirements. Incentives can include expediting permits, tax credits, work force assistance, site identification, county and state financial assistance, and SBA financial assistance.

In conjunction with the Maryland Department of Commerce, the division identifies established programs that will benefit a business. The Maryland Department of Commerce is Maryland's one-stop economic development shop that strives to attract new businesses, stimulate private investment, encourage the expansion and retention of existing companies and provide Maryland businesses with workforce training and financial assistance. The Department markets local products and services at home and abroad.

For more information, please contact EDC's Financial Services Program Manager Ebony Stocks at

(301) 583-4610 or epstocks@co.pg.md.us.  Thank you!

Economic Development Incentives and Tools

TAX INCENTIVES

Enterprise Zone Tax Credit  is an area of a county in which state and local incentives and assistance are offered to encourage the expansion of existing businesses and the attraction of new business activity and jobs. The program provides real property and state income tax credits for businesses located in the zone.

For State income tax credits for new job creation, a one or three year credit for wages paid to eligible new employees. The general credit is a one-time $1,000 credit per new worker. For economically disadvantaged employees, the credit increases to a total of $6,000 per worker distributed over three years.

For local tax credits for real property, a 10 year Prince George’s County real property tax credit is available on the value of a portion of real property improvements. The credit is 80% for the first five years and decreases 10% annually thereafter to 30% in the 10th and final year.

Enhanced income tax credits, real property tax credits, and personal property tax credits are available in Enterprise Zone Focus Areas. 

 

High Technology Tax Credit is a tax credit against the property tax imposed on real property that is used as the premises of manufacturing, fabricating, or assembling facilities that are primarily involved with the applications of engineering, life sciences, computer sciences, research and development, or produces materials, parts, or equipment used in the type of applications noted above.

 

The Real Property Tax Credit is phased in over a five year-period, beginning with a 100% exemption on the increased assessment in year one; 80% in year two; 60% in year three; 40% in year four; and 20% in year five.

 To qualify, a business entity must:

  1. Be primarily involved in high technology manufacturing, fabrication, assembling, or research and development, as determined by the County Executive applying the criteria set forth in the regulations;

  2. Construct, expand, or cause to be constructed or expanded, a building or buildings within the County, to include at least 5,000 square feet of gross floor area (as defined in Subtitle 27 of this Code) to be occupied by said business entity;

  3. Invest at least $500,000 in the construction or expansion of said building or buildings; and

  4. Create at least ten (10) new permanent, full-time positions for said business entity to be located within said building or buildings.  Neither the relocation of an existing position from any other location within the County to the new or expanded building or buildings nor the reclassification of a preexisting position shall constitute new positions for the purposes of this Section.

  

New Jobs Tax Credit (NJTC) and Enhanced New Jobs Tax Credit is a tax credit against the County property tax imposed on real property owned or leased by a business entity or its affiliates and on personal property owned by that business entity or its affiliates if the business entity qualifies for either credit. The company must notify the County before it obtains the new or expanded premises or hires employees to fill new permanent full-time positions that the business intends to claim the tax credit.

New Jobs Tax Credit:

To qualify for a New Jobs Tax Credit (real property and personal property tax credits) a business entity shall:

  1. Obtain at least 5,000 square feet of new or expanded premises in the County (located in a PFA);

  2. Employ at least 25 persons, of which at least thirty percent (30%) shall be County residents, in new permanent full-time positions located in the new or expanded premises in the County during a 24-month period;

     

Enhanced New Jobs Tax Credit:

To qualify, a business (along with its affiliates) must:

  1. Obtain at least 250,000 square feet of new or expanded premises in the County.

  2. Continue to employ at least 2,500 individuals in existing full-time positions paying at least 150% of the federal minimum wage located in the premises.

  3. Employ at least 500 individuals of which thirty percent are County residents in new permanent full time positions in the premises and, if applicable, in newly renovated premises adjoining the new or expanded premises.

    OR

  1. Obtain at least 250,000 square feet of new or expanded premises in the County by purchasing newly constructed premises, constructing new premises, causing new premises to be constructed, or leasing new premises.

Employ at least 1,250 individuals of which thirty percent shall be County residents in new permanent full-time positions located in the new or expanded premises.

 

Business entities must be primarily engaged in one or more of the following at the qualifying premises:

  • Manufacturing or mining

  • Transportation or communications

  • Agriculture, forestry or fishing

  • Research, development or testing

  • Biotechnology

     

  • Computer programming, data processing, or other computer-related services

  • Central Services as define in Section 6-101 of the Economic Development Article of the Maryland Code

  • A public utility

  • Warehousing or business services

 

The real property tax credit phased in over a five year period, beginning at 52% during the first and second taxable years in which a credit is allowed; 39% during the third and fourth taxable years in which a credit is allowed; 26% during the fifth and sixth taxable years in which a credit is allowed; and 0% for each taxable year thereafter.

 

Redevelopment/Revitalization Area Tax Credits are designed to encourage revitalization in existing communities. The County offers eligible projects relief from taxes on any incremental value that they add as a result of making certain real property improvements. Improvements can be non-residential or residential (though the approval of the County Council is required for developments of ten or more single-family dwellings and for multifamily units), and the tax reductions vary accordingly. Ultimately, Revitalization Tax Credits allow for the increase in taxes associated with increased assessed value due to qualified improvements to be phased in over time on the schedules listed below.

For the first year after improvements are completed and assessed on non-residential properties, properties receive: Credit of 100% of the amount of the County property tax imposed on the increased assessment (i.e. the incremental value created by the improvements). The real property tax credit is then reduced gradually as follows: credit of 80% of the taxes on the increased assessment in year two; credit of 60% of the taxes on the increased assessment in year three; credit of 40% of the taxes on the increased assessment in year four; and credit of 20% of the taxes on the increased assessment in year five.

 

Payment in Lieu of Taxes (PILOT) is an agreement from the county to abate property taxes and instead charge an amount equal to a negotiated PILOT. The payment can range from zero up to the full amount of taxes due or more. In some cases taxes are deferred rather than abated. A properly structured PILOT can also be used as a better alternative to a tax increment financing.

A properly structured PILOT can also be used as a better alternative to a tax increment financing. The PILOT agreement could be negotiated so that the payment is equal to the greater of (1) the debt service on the bonds or (2) the tax payment that would otherwise have been due.

A PILOT is a payment in lieu of taxes (also sometimes abbreviated "PILOT"), made to compensate a local government for some or all of the tax revenue that it loses because of the nature of the ownership or use of a particular piece of real property. Usually it relates to the foregone property tax revenue.

Recommendations are made by a county agency along with a private developer to the County Council after County Executive review.

Payments in lieu of taxes are authorized under several sections of the law, wherein local governments are permitted to approve such payments. These agreements may affect state, county, and/or municipal taxes. When an agreement is made, the local assessment office must be notified.

 

New Markets Tax Credit (NMTC) are federally provided, however the Prince George’s County Community Capital Corporation is the local intermediary, which applies to the U.S. Treasury Department to receive New Market Tax Credits (NMTC). These tax credits can be used in variety of ways to facilitate a project by providing an additional equity or financing source.

The term of the credit is seven years. Investors are able to claim a tax credit of 5% for each of the first three years of the credit, 6% for each of the last four years, for a total of 39% over seven years. The net present value of the credit is estimated at 30% over the seven years.

It is important to note that NMTC investors will likely expect a return from the credit above and beyond the federal tax subsidy. As such, NMTC deals should make good economic sense and hold out realistic prospect of returns beyond the credit.

Organizations will apply to the Community Development Financial Institutions Fund (CDFI) of the Treasury Department both to be certified as a Community Development Entity (CDE) and to receive an allocation of New Market Tax Credits. The NMTC is targeted to low-income communities. In general, a Low-Income Community is defined as a Census tract or community within a census tract (Target Area) with a poverty rate of at least 20% or with median income of up to 80% of the area or statewide median, whichever is greater.

 

FINANCE TOOLS

Economic Development Incentive Fund (EDI Fund) is a $50 million County program to expand the commercial tax base, increase job retention and attraction, facilitate development and redevelopment opportunities, and promote transit-oriented development and growth of key industry sectors. Qualified applicants can use funding for land and building acquisition, building infrastructure and empowerment, and equipment acquisition and working capital.

 

PROGRAM CRITERIA:

  • Economic Impact – Measurable outcomes such as job creation and retention, broadening of the commercial tax base, increasing industry and commerce, job growth, promoting local, minority and small business development

  • Alignment with County development goals and priorities – Project adequately reflects the articulated goals for revitalization and is located in or adjacent to the developed tier and key strategic areas

  • “But for” test – Demonstration that the project would not move forward without offering of public incentives from the County

  • Ability to leverage private funds, federal and state financial support, and incentive programs for strategic economic development opportunities for the State and County

     

    All applications are reviewed for consistency with statutory goals and purposes of the program, with independent review of credit and financial soundness of the borrower, and projections.

 

Tax Increment Financing (TIF) is a mechanism that helps fund public improvements related to economic development such as parking facilities, roadways and other public infrastructure.

According to Maryland law, when a development or redevelopment project is going to create additional tax revenues for a jurisdiction, that jurisdiction can in certain cases issue bonds to pay for public improvements for related infrastructure—such as roads, parking, and stormwater management—and can finance those bonds through the incremental increase in revenue that the project will generate.

When using a TIF to incentivize a project, the County delineates a project area and declares a “base” year. The base-year’s assessed valuation for the area is taxed as before. However, the tax revenues from any incrementally higher assessed value above the base that is attributable to the new project will be remitted to a special fund and used to pay debt services for identified improvements.

The County was able to pre-designate certain areas as pre-qualified and eligible for the use of TIFs for development projects. These areas are the “TIF Districts,” and projects within them have increased certainty that they will be approved for a TIF bond, though they will still need to negotiate exact terms with the County. The pre-designated TIF Districts are the New Carrollton Metro Development District, Largo Town Center Metro Development, Prince George’s Plaza Metro Development District, and Suitland-Naylor Road Development District.

 

SBA 504 Long Term Fixed Assets (Commercial Real Estate and Equipment Loan Program) is available to the more established business owners who desire to purchase owner-occupied commercial real estate. Loans are guaranteed by the U.S. Small Business Administration (SBA).

Financing for fixed assets include commercial real estate acquisition, construction, machinery and equipment. Loan terms are 20 years for real estate and 10 years for machinery and equipment. Typically a 10%-20% cash down payment required with personal guaranties.

 

Contractor Cash Flow Fund is available to support local contractors who need to capitalize the first 90 days of labor and materials on a new contract. FSC First is able to assist clients who have been awarded contracts with WSSC, Comcast, Pepco, State federal government. The contract, however, must be assignable and the business must be the prime. The program provides interim financing for the start-up phase of the contract, while the contractor pursues a line of credit for permanent financing of the contract Loans between $25,000 and $250,000 are available.

 

Small Business Growth Fund is a guaranteed revolving loan fund available to established businesses with at least 3–5 years of profitable operating history. This program is designed to assist emerging growth companies in response to access to new markets and expansion challenges.

This program is designed for qualified businesses seeking financing for general working capital, leasehold improvements, inventory, equipment (not rolling stock) purchases, and human capital increases for the purpose of expanding their already-established business.

Loans between $25,000 and $400,000 are available. For start-up businesses, there is a loan maximum of $100,000 and over $250,000 if real estate is involved. Loan terms are up to 10 years and business and personal assets are required to collateralize the loan.

 

SBA Micro Loans provide very small loans to start-up, newly established, or growing small businesses. SBA makes funds available to nonprofit community-based lenders, who in turn make loans to eligible borrowers in amounts up to a maximum of $50,000. The average loan size is about $13,000.

 

SBA Special Purpose Loans offer various special purpose loans to help grow businesses to meet international demand, to aid businesses that have been impacted by NAFTA, to assist in implementing employee ownership plans, and to help implement pollution control mechanisms, in addition to other special programs.

 

Revenue Bonds are used to finance the construction of a manufacturing or commercial facility for a private user. The county receives bond authorization from the State of Maryland for the purpose of issuing non-housing industrial development revenue bonds. Authorized projects include manufacturing facilities with a total project cost of less than $10 million.

 

Parking Revenue Bonds are issued to fund the acquisition, construction or renovation of parking garages, lots and other facilities. The bonds are typically secured by revenues from the garage being financed along with other potential parking revenue sources in the county, including other parking garage, parking tickets, and parking meter revenues. The financing tool allows the county to finance new parking facilities.

 

OTHER INCENTIVE PROGRAMS

Foreign Trade Zone (FTZ) covers the entire County. FTZs are intendedto facilitate import and export activities by allowing domestic activity involving foreign items to take place prior to formal customs entry. This has the effect of reducing duties, tariffs and quota charges. If the items are re-exported, duty is waived.

 

FTZ benefits to companies include

  • Deferred for products admitted into the FTZ, which improves cash flow

  • Eliminated on products imported, and then re-exported from the FTZ to international markets

  • Reduced by taking advantage of the inverted tariff rule that states if you bring in parts that are manufactured into a whole, you can pay the duty of the whole instead of the parts

  • Eliminated on value added transformations

  • Eliminated on damaged goods that are destroyed in FTZ

  • Deferred for Zone-to-Zone Transfers

    Also, companies are able to:

  • Eliminate individual entry filings by filing one consolidated entry per week, and thus reduce fees

  • Run more efficient inventory control systems

Participate in special Customs procedures, such as direct delivery, to expedite the movement of cargo

 

WSSC Systems Waiver allows the County Executive to waive the WSSC/SDC (System Development Charge) for eligible revitalization projects and to partially waive the charge for elderly housing and biotechnology projects. Projects must meet the eligibility criteria. Full or partial exemptions from the WSSC Systems Development Charge (SDC) are available in the Enterprise Zone. Up to $50,000 per project; annual maximum countywide is $500,000. A project can be a new building, remodeling of an existing building or remodeling of a portion of an existing building.