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1. What is the General Income Tax Credit for hiring new employees?

The best way to explain the General Income Tax Credit for hiring new employees is by highlighting how the General Income Tax Credit works in the following:

• If a corporation hires a new employee when it locates its business in the City of Seat Pleasant, a Maryland Focused Enterprise Zone, the corporation would be entitled to a one-time tax credit of $1,500. If the corporation's income tax liability is $1,500 over a one-year period, the tax credit would lower the business tax liability of the corporation to zero over the one-year period and return $1,500 in cash to the corporation's balance statement.

2. What is the Large State Income Tax Credit for hiring economically disadvantaged employees?

The following is an illustration of how the Large State Income Tax Credit for hiring economically disadvantaged employees works:

• If a corporation hires a new employee when it locates its business in the City of Seat Pleasant, a Maryland Focus Enterprise Zone, the corporation would be entitled to a tax credit of $9,000 over a three-year period for hiring a new economically disadvantaged employee. If the corporate income tax liability is $9,000 over a three-year period, the tax credit would lower the business taxes for the corporation to zero over the three-year period and return $9,000 in cash to the corporation's balance statement.

3. What is the New Job Creation Tax Credit for hiring economically disadvantaged employees?

The following is an illustration of how the New Job Creation Tax Credit for hiring economically disadvantaged employees works:

• If a corporation hires a new employee when locating its business in the City of Seat Pleasant, a Maryland Focus Enterprise Zone. By locating the business in a Focused Enterprise Zone under the New Job Creation Tax Credit Program, the corporation would be entitled to a one-time tax credit of $5,000. If the corporation's income tax liability is $5,000 in the current year period, this tax credit would lower the business taxes for the corporation to zero during the current year period and return $5,000 in cash to its corporation balance sheet.
• Sole proprietorship, corporations, and pass-through entities such as partnerships, subchapter S Corporations, limited liability companies, and business trusts may claim these credits.

4. What is a Business Personal Property Tax Credit?

Any new or existing businesses investing in new plants and equipment in the City of Seat Pleasant may claim a business personal property tax credit entitling them, over a 10-year period, to an 80% reduction in their taxes on these investments in new fixed assets over a 10-year period. An illustration is highlighted in the following depicting how the Business Property Tax Credit operates:

• If a new business entering the city invests $10,000 each year for the next ten years in new technology or health business equipment, then the business would be eligible to apply for a reduction of 80% in its personal property tax bill for each of the ten years. This is 80% tax reduction will allow the business to add cash back its working capital.

5. What are Real Estate Tax Credits for new construction?

Any real estate developer owning real property in the City of Seat Pleasant and that expends funds on any new construction or improvement to nonresidential units in the City of Seat Pleasant may claim a 10 year Real Property Tax Credit of 80% to reduce his or her real property taxes resulting from this investment in new construction or improvement to his or her real property. To qualify, an entity must:

1. Be primarily involved in high technology manufacturing, fabrication, assembling, or research and development, as determined by the County and the City applying the criteria set forth in the regulations.
2. Construct, expand, or cause to be constructed or expanded, a building or buildings within the County or City, to include at least 5,000 square feet of gross floor area (as defined in Subtitle 27 of this Code) to be occupied by the said business entity.
3. Invest at least $500,000 in the construction or expansion of said building or buildings.
4. Create at least ten new permanent, full-time positions for the said business entity to be located within said building or buildings. Neither the relocation of an existing position from any other location within the County or the City to the new or expanded building or buildings nor the reclassification of a preexisting position shall constitute new positions for the purposes of this Section.

6. What are Opportunity Zones Tax Deferrals or Abatements?

The City of Seat Pleasant was designated as an Opportunity Zone by the United States Treasury Department and the Governor of Maryland as of June 2018. This entitles investors with high unrealized capital gains to cash in the appreciation of their gains while deferring the taxes on the gains if they redirect these gains into properties located in areas approved as Opportunity Zones. The City of Seat Pleasant was designed as Opportunity Zones to spur economic development by providing tax benefits to investors:

• First, investors can defer tax on any prior gains invested in a Qualified Opportunity Fund (QOF) until the earlier of the date on which the investment in a QOF is sold or exchanged, or December 31, 2026. If the QOF investment is held for longer than 5 years, there is a 10% exclusion of the deferred gain. If held for more than 7 years, the 10% becomes 15%.
• Second, if the investor holds the investment in the Qualified Opportunity Fund for at least ten years, the investor is eligible for an increase if the basis of the QOF investment is equal to its fair market value on the date that the QOF investment is sold or exchanged.

7. What is a New Market Tax Credit (NMTC) and how does the Tax Credit Work in the City of Seat Pleasant?

The credit provides an incentive for investment in low-income communities. The U.S. Department of the Treasury competitively allocates tax credit authority to intermediaries that select investment projects. Investors receive a tax credit against their federal income tax. NMTC investors provide capital to community development entities (CDEs), and in exchange are awarded credits against their federal tax obligations.

Investors can claim their allotted tax credits in as little as seven years - 5% of the investment for each of the first three years and 6% of the project for the remaining four years - for a total of 39% of the NMTC project. A CDE can be its own investor or find an outside investor. Investors are primarily corporate entities-often large international banks or other regulated financial institutions-but any entity or person is eligible to claim NMTCs.

8. What is the purpose of Health Enterprise Zone (HEZ) Investment Initiative?

The purpose of the HEZ Investment Initiatives is to:

• Reduce health disparities among racial and ethnic minority populations and among geographic areas.
• Improve health care access and health outcomes in underserved communities.
• Reduce health care costs and hospital admissions and re-admissions.

9. How does a Sustainable Community Designation receive funding?

Under the Sustainable Community Designation, the City of Seat Pleasant may apply for funding to cover a developer's soft costs for marketing studies, architectural drawings or renderings.

10. What is a Qualified Opportunity Fund?

A Qualified Opportunity Fund is an investment vehicle that is set up as either a partnership or corporation for investing in eligible property that is located in a Qualified Opportunity Zone.

11. Does an investor need to live in Seat Pleasant to take advantage of the tax benefits of an Opportunity Zone?

No, you can get the tax benefits even if you don't live, work or have a business in an Opportunity Zone. All you need to do is invest a recognized gain in a Qualified Opportunity Fund and elect to defer the tax on that gain. Along with the tax benefit associated with the Opportunity Zones program outlined about the City can also use New Market Tax Credit to attract high net worth investors looking for tax concessions.

12. Is the City of Seat Pleasant a qualified HUB Zone?

The City of Seat Pleasant is in a qualified HUB Zone and any business located in the city that is minority owned and whose owners live in the city can apply to become a HUB Zone certified business. The HUB Zone program has three mechanisms for targeting contracts to HUB Zone certified businesses:

• Set-asides
• Sole source awards
• Price preferences

In the eight-year period from Fiscal Year (FY) 2000 through FY 2007, there have been about 21,350 contracts totaling $6.28 billion awarded through the three HUB Zone mechanisms.

13. What are the guidelines for federal level tax incentives?

• Economic Impact - Measurable outcomes such as job creation and retention, broadening of the commercial tax base, increasing industry and commerce, job growth, promoting local, minority and small business development
• Alignment with City development goals and priorities - Project adequately reflects the articulated goals for revitalization and is located in or adjacent to the developed tier and key strategic areas
• "But for" test - Demonstration that the project would not move forward without an offering of public incentives from the City.
• Ability to leverage private funds, federal and state financial support, and incentive programs for strategic economic development opportunities for the federal, state, county, and City

All investors are vetted for consistency with statutory goals and purposes of the program, with an independent review of credit and financial soundness of the borrower, and projections

14. How do I apply for a business license?

To apply for a business license please visit our Business License Application page.

15. What is the Economic Development Revolving Loan Fund (ED-RLF)?

The purpose of the ED-RLF is to assist with business financial needs that will create and retain employment opportunities in the City of Seat Pleasant, with major emphasis on employment for persons from low-to-moderate income households. For application and eligibility information please visit the Economic Development section.

16. What is the EB-5 Visa Program?

The United States EB-5 Visa, Employment-Based Fifth Preference Category or EB-5 Immigrant Investor Visa Program, created in 1990 by the Immigration Act of 1990, provides a method for eligible Immigrant Investors to become lawful permanent residents - informally known as "green card" holders - by investing at least $1,000,000 to finance a business in the City of Seat Pleasant that will employ at least 10 American workers.

Most immigrant investors who use the EB-5 program can invest in a targeted employment area (TEA) such as the City of Seat Pleasant an area of high unemployment. The investment threshold has been lowered to $500,000. The EB-5 program is intended to encourage both "foreign investments and economic growth. The EB-5 program is intended to encourage both "foreign investments and economic growth.

The EB-5 Immigrant Investor Visa Program is one of five employment-based (EB) preference programs in the United States. Immigrant investors have the choice of investing individually in target areas such as City of Seat Pleasant or they can choose to work through a larger investor pool via regional centers. Regional centers are federally approved third-party intermediaries that "connect foreign investors with developers in need of funding, and channel these investment into target areas such as the City of Seat Pleasant.

17. What's the difference between an Opportunity Zone investment versus a Non-Opportunity Zone investment?

By clicking this module, an illustration of the tax saving on a capital gain investment of $100,000 into an opportunity fund for properties in an opportunity zone investment versus cashing in the gains now and paying the taxes and place the balance into a non-opportunity zone asset yielding 15% over a ten-year period. The illustration assumes a 15% annual return and 37% combined income tax bracket.