THE OPPORTUNITY ZONE PROGRAM
The Opportunity Zone Program was introduced as part of the 2017 Tax Act. The program aims to spur economic development and job creation in designated economically-distressed communities called “Opportunity Zones.” New investment in these designated areas may qualify for preferential tax treatment.
By reinvesting capital gains into a qualified “Opportunity Zone Fund,” investors can take advantage of three substantial tax benefits.
- Capital gains taxes on the invested capital gains can be deferred until the earlier of the investment sale or exchange date or December 31, 2026.
- After holding an investment in an Opportunity Zone Fund for five or seven years, the capital gains tax on the original capital gains is reduced by 10% or 15% respectively.
- After holding an investment in an Opportunity Zone Fund for at least ten years, an investor’s disposition of an investment in an Opportunity Zone Fund qualifies for permanent exclusion from capital gains tax on the gains accrued after the initial investment in the Opportunity Zone Fund. Note: Investors should discuss eligibility with their preferred accountant.
THE ENTERPRISE ZONE PROGRAM
Baltimore County has three Enterprise Zones designated by the Maryland Department of Business & Economic Development. The purpose of the zones is to retain and spur expansion of existing companies, promote development of underutilized land, create well-paying jobs, and revitalize older office and industrial areas of Baltimore County. Investors or employers who invest in real property or create new jobs in the designated Enterprise Zones may qualify for property or income tax credits.
- For the first five years of an investment in real property, investors can receive a tax credit of 80% of the increase in property taxes due to improvements to the property. This credit declines 10% annually in the remaining five years.
- Employers can receive a state income tax credit of up to $6,000 per new hire over the employee’s first three years of employment. Employers that increase employment by at least ten full-time employees may also qualify for reductions in utility rates.
- Federal & State Historic Tax Credit Recipient
- Brownfield Property Tax Credit Eligibility
- Maryland Job Creation Tax Credit (Commerce)
- More Jobs for Marylanders (Commerce)
- Priority Funding Areas (Maryland Department of Planning)
Additionally, Aviation Station anticipates receiving the “Transit-Oriented Development” and “Sustainable Community” designations from the State of Maryland, which provides meaningful State-level prioritization and County-level benefits.
SALES & USE TAX EXEMPTION
Senate Bill 185 executed by Governor Larry Hogan in Q2 2020 allows Aviation Station (the Developer as well as the Tenants) to waive the Maryland State Sales Tax (6.0%) on Construction Materials and Warehousing Equipment for new construction and renovation. Aviation Station will be the second project in the State’s history to receive this economic benefit. The Sales & Use Tax Exemption sets Aviation Station in rare company and will set it apart from other competitive sites. This major economic enhancement will be in place for a 10-year period from July 2020 – June 2030 and will save the Project and its Tenants millions of dollars. By sharing in this highly unique Sales Tax Waiver, Aviation Station will position itself to attract a myriad of dynamic Tenants and future investment.