​In general, an Enterprise Zone is a distressed or low-income area in which businesses who stay, locate, or expand are eligible for a tax credit. To designate an area as an Enterprise Zone a local government must submit application to the Department of Commerce (Commerce). To be approved, an area must meet the qualifications specified in Economic Development Article §5-704.

The Enterprise Zone program has three components eligible to receive tax credits. A real estate tax credit, an employment tax credit, and a focus area tax credit, which increases the real estate tax and employment tax credits as well as adds an additional abatement for business personal property.

Applications by local governments must be submitted by either April 15th or October 15th of a given year to be considered for Enterprise Zone approval. Commerce will notify the Department of Assessments and Taxation (SDAT) of newly authorized zones by June 15th and December 15th of a given year.

Pipeline to Administer Enterprise Zone Credits

• Commerce designates an Enterprise Zone in a specified area of a given county. These designated Enterprise Zones are identified to SDAT by Commerce. Once identified, the AAVS Administrator will enter the Enterprise in AAVS.
• Property owners or businesses within a specified Enterprise Zone will submit application to their local Zone Administrator for approval.
• Local Zone Administrators will forward a certification letter to SDAT and Commerce once approval is given to a business or property owner. This letter will clearly state the date of certification, the July 1 to be used to determine a Base Value for the credits, and the 1st year July 1 credits are to be given.
• Each May, SDAT local offices should submit a summary sheet of eligible Enterprise Zone accounts entered in AAVS to SDAT Headquarters along with individual account sheets for any properties which may have been revised after previous year submissions.
• Each May, SDAT local offices should also submit each individual Enterprise Zone sheets to the appropriate Zone administrator for a given zone. Local Zone Administrators will utilize the individual sheets provided to reconcile current and previous lists of certified properties.

When Enterprise Zone credits are given to property owners or business owners, credits are administered by local county finance offices as part of tax billing. Local taxing jurisdictions are then entitled to a payment from the State of Maryland equal to 50% of the allotted credit amount. These payments must be budgeted by the Department of Assessments and Taxation.