(Oct. 13, 2016) In an effort to keep Berlin competitive in attracting new business, the county will apply to the Maryland Department of Commerce to re-designate the area as an Enterprise Zone.
The Worcester County Commissioners unanimously approved the application following a public hearing at its meeting on Oct. 4.
Merry Mears, county director of Economic Development, said Berlin is due to renew the agreement last completed in October 2006. Snow Hill and Pocomoke are also currently labeled as Enterprise Zones through the state program.
“The designation presents certain business opportunities for folks locating their businesses in these zones,” she said. “They can receive certain tax credits for number of employees and … toward their real property tax.”
Berlin-resident Kenneth Graves shared his concerns about potential favoritism resulting from the program.
“Who gets a free ride and who doesn’t get a free ride?” he asked. “Anybody that comes here and opens a business gets a free ride on the taxes.”
Also commenting was Linda Reiner who characterized the program as an entitlement and wondered if property taxes would be increased to subsidize the tax credits.
Mears said the program is a state investment and doesn’t require financial backing by the county.
“The Enterprise Zone status is actually awarded by the State Department of Hosing and Community Development and is a special fund set aside to encourage business growth and development within economically depressed areas of the state,” she said. “I consider us fortunate to have designations in three areas for this type of investment.”
Ivy Wells, Berlin’s director of economic and community development, said her office uses the tax credits to encourage businesses to set up in Berlin.
“The Enterprise Zone tax credit is not only a real estate tax credit, it’s also an incentive to hire disadvantaged employees,” she said. “There are a wide variety of stipulations that a company has to meet and there are extremely strict.”
The Enterprise Zones Program provides businesses with credits for both income and property taxes. Qualifying companies can receive a 10-year credit against local real property taxes, which holds at 80 percent of an eligible property asset for the first five years, but this is then reduced by 10 percent over the last five years of the agreement.
Two income tax credits also are included in the program. The first is a one-time $1,000 credit for every new employee staffing a freshly created position in an area designated as an enterprise zone. There is also a three-year income tax credit for economically disadvantaged employees, which is set at $3,000 the first year and drops by a thousand dollars each year for the next two.
Wells said her office uses the tax allowances to encourage job creation.
“The credits are more valuable than deductions because credits are subtracted directly from income tax liability,” she said. “Berlin needs to stay competitive. We have a lot of properties that need to be developed and Enterprise Zone tax credits are a good incentive.”
The Worcester County Commissioners unanimously approved the application following a public hearing at its meeting on Oct. 4.
Merry Mears, county director of Economic Development, said Berlin is due to renew the agreement last completed in October 2006. Snow Hill and Pocomoke are also currently labeled as Enterprise Zones through the state program.
“The designation presents certain business opportunities for folks locating their businesses in these zones,” she said. “They can receive certain tax credits for number of employees and … toward their real property tax.”
Berlin-resident Kenneth Graves shared his concerns about potential favoritism resulting from the program.
“Who gets a free ride and who doesn’t get a free ride?” he asked. “Anybody that comes here and opens a business gets a free ride on the taxes.”
Also commenting was Linda Reiner who characterized the program as an entitlement and wondered if property taxes would be increased to subsidize the tax credits.
Mears said the program is a state investment and doesn’t require financial backing by the county.
“The Enterprise Zone status is actually awarded by the State Department of Hosing and Community Development and is a special fund set aside to encourage business growth and development within economically depressed areas of the state,” she said. “I consider us fortunate to have designations in three areas for this type of investment.”
Ivy Wells, Berlin’s director of economic and community development, said her office uses the tax credits to encourage businesses to set up in Berlin.
“The Enterprise Zone tax credit is not only a real estate tax credit, it’s also an incentive to hire disadvantaged employees,” she said. “There are a wide variety of stipulations that a company has to meet and there are extremely strict.”
The Enterprise Zones Program provides businesses with credits for both income and property taxes. Qualifying companies can receive a 10-year credit against local real property taxes, which holds at 80 percent of an eligible property asset for the first five years, but this is then reduced by 10 percent over the last five years of the agreement.
Two income tax credits also are included in the program. The first is a one-time $1,000 credit for every new employee staffing a freshly created position in an area designated as an enterprise zone. There is also a three-year income tax credit for economically disadvantaged employees, which is set at $3,000 the first year and drops by a thousand dollars each year for the next two.
Wells said her office uses the tax allowances to encourage job creation.
“The credits are more valuable than deductions because credits are subtracted directly from income tax liability,” she said. “Berlin needs to stay competitive. We have a lot of properties that need to be developed and Enterprise Zone tax credits are a good incentive.”