MD: Maryland Accepting Applications for Data Center Tax Incentive Program
26 Oct, 2020
The Maryland Department of Commerce announced today that it is now accepting applications for the Data Center Maryland Sales and Use Tax Exemption Incentive Program. As part of this new economic development incentive, data centers that locate or expand in Maryland and create new, full-time jobs can receive an exemption from the state sales and use tax for up to 20 years.
This program, approved by the Maryland General Assembly during the 2020 legislative session and signed into law by Governor Larry Hogan, is designed to make Maryland more competitive as states work to attract more data centers to the region.
“Making Maryland a more supportive and competitive state for business has been a top priority of my administration since I took office,” said Governor Hogan. “Ensuring that Maryland is ‘Open for Business’ is more important now than it ever was. This new incentive program will ensure that data center companies see that Maryland is the best place for their new or expanding facilities and the good jobs that come with them.”
Data center businesses are eligible for a 10-year exemption, subject to annual renewal, if they create at least five qualified jobs within three years of applying for the program and make a minimum investment. In Tier 1 Areas of the state, businesses must invest at least $2 million in qualified data center personal property; in all other areas of the state, businesses must invest at least $5 million in data center personal property.
If a business invests at least $250 million in qualified data center personal property, the benefit period extends to 20 years, subject to annual renewal.
“Data centers are big business in our region, and this program will help ensure that Maryland remains competitive with our neighbors for these lucrative projects,” said Maryland Commerce Secretary Kelly M. Schulz. “Having more data centers in our state will help us attract businesses from across the technology sector who want to be close to these facilities. This is great news for our state and our business community.”
Tier 1 areas include Baltimore City, Allegany, Baltimore, Caroline, Cecil, Dorchester, Garrett, Kent, Prince George’s, Somerset, Washington, Wicomico and Worcester Counties, as well as federally designated Opportunity Zones located in any Maryland County.
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