Jun. 27—Frederick County Councilman Mason Carter on Tuesday proposed a bill that would reduce the amount of new investment required as well as the number of new jobs for commercial and industrial businesses to receive a tax credit.
The Commercial and Industrial Business Tax Credit is a local program that gives a real property tax credit, between 10% to 100%, to manufacturers and other industrial operations that plans to create jobs and continue to grow in the county, county documents say.
The credit is dependent on the projected economic impact of the project and can be used for no more than 10 years.
Currently, the only two businesses who use the tax credit are Kite Pharma and Kroger, county documents say. Carter, who represents District 5, said his bill would allow smaller businesses to access this credit.
The current entry level requirements to obtain the property tax credit is to have $5 million of new investments and at least 25 new jobs that pay 150% of the minimum wage.
Carter's proposal would reduce the amount of required new investment to $1.5 million and the number of new jobs down from 25 to 3 in order to receive a 20% tax credit.
Carter said during Tuesday's meeting that a future version of the bill may exclude the 150% minimum wage part of the current law after he consults with the legal team.
"By easing this eligibility requirement, we can open up this credit to smaller businesses, many of which have struggled with obtaining and retaining capital," Carter wrote.
He additionally added a table that showed a proposed incremental tax credit increase, based on investment and jobs. This would help bring transparency to the tax credit.
The current law says that a business that wants to take advantage of the tax credit would have to enter an agreement with the county. The county executive would negotiate the credit amount based on the investment and new jobs the company would bring.
Current law also states a tax credit of 60% or higher would have to be approved by the County Council.
Carter's proposal would remove the county executive's and county council's role in the process, and instead set up an incremental tax system.
To receive a 40% tax credit, a business must have at least $3 million of new investments and at least 10 new jobs. To get a 60% credit, a business must have at least $5 million of new investments and at least 25 new jobs.
At least $10 million of new investments and at least 50 new jobs would get a business 80% tax credit and finally, to receive a 100% tax credit, a business must have at least $100 million of new investments and at least 100 new jobs.