Code of Maryland Regulations
Title 24 - DEPARTMENT OF COMMERCE
Subtitle 05 - ECONOMIC DEVELOPMENT
Chapter 24.05.20 - Job Creation Tax Credit
Section 24.05.20.04 - Definitions
Universal Citation: MD Code Reg 24.05.20.04
Current through Register Vol. 51, No. 6, March 22, 2024
A. In this chapter, the following terms have the meanings indicated.
B. Terms Defined.
(1) "Act" means the Job Creation Tax Credit Act at Economic Development Article, Title 6, Subtitle 3, Annotated Code of Maryland.
(2) "Average wage" means the average wage for all employment in the State as reported from time to time by the Department of Labor, Licensing, and Regulation.
(3) Central Administrative Offices.
(a) "Central administrative offices" means a facility where a business entity's central management or administrative functions are handled on either a regional or national basis.
(b) "Central administrative offices" includes offices or locations in the region where functions such as personnel, planning, general management, accounting and financial, purchasing, advertising, legal, data processing, and research and development are performed.
(4) "Central financial, real estate, or insurance services" means the performance of central management or administrative functions for a business entity engaged in financial, real estate, or insurance services.
(5) "Central management or administrative functions" includes general management, accounting, computer tabulating, data processing, purchasing, transportation or shipping, advertising, legal, financial, and research and development.
(6) Company Headquarters.
(a) "Company headquarters" means a facility where the majority of a business entity's financial, personnel, legal, and planning functions are handled either on a regional or national basis.
(b) "Company headquarters" does not include the headquarters of a professional sports organization.
(7) "Credit year" means the taxable year for which a qualified business entity claims the tax credit.
(8) "Department" means the Department of Business and Economic Development.
(9) "Federal minimum wage" means the wage established by the Fair Labor Standards Act of 1938 as amended. For purposes of the tax credit, hourly wages may include bonuses and commissions, prorated on an hourly basis, if these bonuses and commissions are reported on the W-2 Wage and Tax Statements of the qualified employees.
(10) "Full-time position" means a position requiring at least 840 hours of an employee's time during at least 24 weeks in a 6-month period (an average of 35 hours per week).
(11) "Person" includes an individual, corporation, business trust, partnership, limited liability company, association, two or more persons having a joint or common interest, or any other legal or commercial entity.
(12) "Qualified business entity" has the meaning stated in §C of this regulation.
(13) "Qualified employee" means an employee filling a qualified position.
(14) Qualified Position.
(a) "Qualified position" means a position that:
(i) Is a full-time position;
(ii) Is of indefinite duration;
(iii) Pays at least 150 percent of the federal minimum wage;
(iv) Is located in Maryland;
(v) Is newly created, as a result of the establishment or expansion of a business facility in a single location in the State; and
(vi) Is filled.
(b) "Qualified position" does not include a position that is:
(i) Created when an employment function is shifted from an existing business facility of the business entity located in the State to another business facility of the same business entity if the position does not represent a net new job in the State;
(ii) Created through a change in ownership of a trade or business;
(iii) Created through a consolidation, merger, or restructuring of a business entity if the position does not represent a net new job in the State;
(iv) Created when an employment function is contractually shifted from an existing business entity located in the State to another business entity if the position does not represent a net new job in the State; or
(v) Filled for a period of less than 12 months.
(c) "Qualified position" is limited to the following positions if the entity is engaged in the operation of entertainment, recreational, cultural, or tourism-related activities:
(i) Positions engaged in the operation of entertainment, recreational, cultural, or tourism-related activities for the multiuse facility in which the entertainment, recreational, cultural, or tourism-related activities are operated; or
(ii) Positions engaged in management, marketing, building maintenance, hotel services, and security for the facility.
(d) "Qualified position" does not include a temporary training position but does include a permanent position which is filled by hiring a successful trainee from a temporary training position that does not exceed 3 months in length.
(15) "Retention period" means the 3-year period after the credit year during which the qualified business entity is required to maintain the qualified positions. The retention period may be extended under Regulation .10 of this chapter.
(16) "Revitalization area" means an area designated as:
(a) An enterprise zone by the Secretary under Economic Development Article, §
5-704, Annotated Code of Maryland;
(b) An empowerment zone by the United States Government pursuant to 26 U.S.C. §
1391 et seq.; or
(c) A neighborhood that is eligible for economic revitalization assistance under Housing and Community Development Article, §
6-303, Annotated Code of Maryland.
(17) "Secretary" means the Secretary of Business and Economic Development or the Secretary's designee.
(18) State Priority Funding Area.
(a) "State priority funding area" includes the following areas:
(i) An incorporated municipality;
(ii) A designated neighborhood, as defined in Housing and Community Development Article, §
6-305, Annotated Code of Maryland;
(iii) An enterprise zone as designated under Economic Development Article, §
5-704, Annotated Code of Maryland, or by the United States government;
(iv) Those areas of the State located between Interstate 495 and the District of Columbia;
(v) Those areas of the State located between Interstate 695 and Baltimore City;
(vi) Not more than one area in a county designated in writing to the Department by the county as a priority funding area under State Finance and Procurement Article, § 5-7 B-03(d), Annotated Code of Maryland; and
(vii) That portion of the port land use development zone, as defined in Transportation Article, §6-501(e), Annotated Code of Maryland, that has been designated as an area appropriate for growth in the county comprehensive master plan.
(b) "State priority funding area", for purposes of qualifying for the tax credit, includes the entire area of a business facility, if at least 25 percent of the business facility is located within a State priority funding area.
(19) "Tax credit" means job creation tax credit.
C. Qualified Business Entity.
(1) "Qualified business entity" means a person conducting or operating a qualified type of business in Maryland who:
(a) Is engaged in an activity specified in Regulation .07 of this chapter;
(b) During any 24-month period creates at least:
(i) 60 qualified positions,
(ii) 30 qualified positions if the aggregate payroll for the qualified positions is greater than a threshold amount equal to the product of multiplying 60 times the State's average annual salary, as determined by the Department, or
(iii) 25 qualified positions if the business facility established or expanded by the business entity is located in a State priority funding area; and
(c) Is certified by the Secretary under Regulation .06 of this chapter as qualifying for the tax credit.
(2) "Qualified business entity" includes the persons owning or operating a multiuse facility in which the entertainment, recreation, cultural, or tourism-related activities are operated.
(3) "Qualified business entity" does not include any separate entity that leases retail space at a multiuse facility.
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