Tax Expenditure Report
Note: eligibility for the majority of
credits is determined by the Maryland State Department of Assessments and
Taxation (SDAT). Specifically, SDAT determines whether a property is a “principal
residence” (i.e., owner-occupied) which makes the property eligible for the
County’s largest tax expenditures: (i) homestead credit, and (ii) local income
tax offset credit. Moreover, the computation of many credits is performed by
SDAT (e.g., homestead credit, homeowners property tax credit, senior credit), with
only a minor portion of the credits computed by the Department of Finance,
Treasury Division.
Supplemental Homeowner’s Property Tax Credit
Description
The program provides tax credits
for homeowners who qualify on the basis of their household income as compared
to their tax bill. The Maryland’s
Homeowner’s Property Tax Credit (HOTC) program and its Montgomery County
supplement are administered by the State Department of Assessments and Taxation
(SDAT). The tax credits are granted to eligible homeowners of all ages. The
County supplemental credit pertains only to County property taxes. Although
this credit does not require a separate application, taxpayers must apply for
the State HOTC to be considered for the supplemental tax credit.
Effective levy year 2005,
Montgomery County greatly enhanced the program by (1) doubling the maximum
property assessment amount used for computing the tax to $300,000, and (2)
changing the income formula to allow for eligibility at a higher income level.
Due to changes in the State HOTC credit program in levy year 2006, qualified retirement
savings are now excluded from the maximum $200,000 net worth requirement (this
net worth also excludes the value of the principal property).
Although, generally, applications
must be made by September 1 to be applicable that tax year, for
taxpayers at least 70 years of age, retroactive applications may be submitted
for 3 prior years.
Authority
Maryland Code: TAX-PROPERTY: TITLE 9. PROPERTY TAX CREDITS AND PROPERTY
TAX RELIEF: SUBTITLE 1. STATEWIDE MANDATORY 9-104. Homeowners' tax credits
Montgomery County Code, Chapter 52, Article I, Section 52-11A
Effective Date
February 1, 1986
Contact
SDAT in Baltimore,
MD at (800) 944-7403
Senior Tax Credit
Description
The County introduced this credit
in levy year 2007 for eligible residents at least 70 years of age. This credit
is calculated as 25 percent of the combined State Homeowners’ Tax Credit and County Supplement.
This credit, if applicable, is added to the County Supplement
and reduces the taxpayer’s tax bill. The Senior credit may be based on (i) the
State credit (if the County
Supplement is zero), (ii)
the County Supplement (if the State credit is zero), or (iii) both the State
credit and County
Supplement. Although this
credit does not require a separate application, taxpayers must apply for the
State HOTC to be considered for the senior tax credit.
Authority
Maryland Code: TAX-PROPERTY: TITLE 9. PROPERTY TAX CREDITS AND PROPERTY
TAX RELIEF: SUBTITLE 2. STATEWIDE OPTIONAL: § 9-245. Credit for individuals at least 70 years old
Montgomery
County Code, Chapter 52, Article I,
Section 52-11C
Effective Date
July 1, 2007
Contact
SDAT in Baltimore, MD
at (800) 944-7403
Homestead Property Tax Credit
Description
To
assist homeowners with the fiscal impact from large assessment increases, the Homestead Property Tax Credit program
limits the annual taxable assessment increase to a rate set annually by county
resolution between 1% and 10%. This program is administered by the State Department
of Assessments and Taxation (SDAT) and applied only to owner-occupied
residential dwellings. Note: this credit is not applicable in the first year
following the purchase of a new home.
The
State of Maryland, Montgomery County, and municipalities in Montgomery County
(with the exception of the Town of Kensington which elected 5% effective LY
2006) use a 10% homestead credit which results in any annual assessment growth
in excess of 10% to become a credit. For example, if the annual phase-in of
assessment growth is 25%, the homestead credit will reflect 15% while the
remaining 10% is reflected in taxable assessment growth that year.
In
addition to limiting annual growth in taxable assessment for homeowners, the
homestead credit spreads out the assessment growth over a longer period of time
resulting in a stable revenue flow. Since the cumulative credit can be
significant, some taxpayers may still observe growth in taxable assessment
during times of weak real estate market conditions as prior year growth is
still being phased in.
Authority
Maryland Code: TAX-PROPERTY: TITLE 9. PROPERTY TAX CREDITS AND PROPERTY
TAX RELIEF: SUBTITLE 1. STATEWIDE MANDATORY: § 9-105. Homestead property tax credit.
Effective Date
1985
Contact
SDAT in Rockville,
MD at (240) 314-4510
Property Tax Credit – Local Income Tax Offset
Description
The County may grant, by law, a property tax credit
against the county tax imposed on real property, in order to offset, in whole
or in part, increases in the county income tax revenues resulting from a county
income tax rate in excess of 2.6%.
This tax credit is available only to the owner of an
owner occupied residential property (i.e., principal residence), as determined
by SDAT. The County establishes the amount of a property tax credit under this
section by Resolution.
Note: The County’s “piggyback” income tax was 60% of the Maryland income tax (effectively 3.00%) in tax year 1998, and changed to a 3.20% income tax rate based on Maryland Adjusted Gross Income (AGI) effective tax year 2004. Therefore, prior to tax year 2004, the credit could be based on income tax revenues resulting from a county “piggyback” income tax in excess of 50% of the Maryland income tax..
Authority
Maryland Code: TAX-PROPERTY: TITLE 9. PROPERTY TAX CREDITS AND PROPERTY TAX RELIEF: SUBTITLE 2.
STATEWIDE OPTIONAL: § 9-221. Offsets of local income tax rate increases
Effective Date
July 1, 1992
Contact
Department of Finance in Rockville, MD
at (240) 777-0311
Enterprise Zone Tax Credit
Description
This tax credit is available to
businesses that locate in designated areas of downtown Silver Spring,
Takoma Park/Long Branch, and Wheaton,
and is designed to spur economic growth in these areas. This real property tax
credit is available only for nonresidential properties located within the Enterprise
Zones and is based on growth in property assessment. Under the Enterprise Zone
law, personal property is not included. The “base year assessment” is the real
property assessment for the year before any new construction or refurbishing is
done. The credit is based on the increase in the assessment for each of the
next 10 years compared to the base-year assessment. The credit itself will be
given on the actual taxes that result from the increase in assessment, using
the following rate schedule:
Years 1 through 5:Credit = 80% of assessment increase versusthe base year
Year 6: Credit = 70%
Year 7: Credit = 60%
Year 8: Credit = 50%
Year 9: Credit = 40%
Year 10: Credit = 30% (expires thereafter)
The State of Maryland
also grants a tax credit for businesses that locate in Enterprise Zones. However
the State’s credit is for State income taxes and is related to the number of
new employees (in the Enterprise Zone) that a business hires.
Authority
Maryland Code: TAX-PROPERTY: TITLE 9. PROPERTY TAX CREDITS AND PROPERTY
TAX RELIEF: SUBTITLE 1. STATEWIDE MANDATORY: § 9-103. Enterprise zones
Effective Date
1985
Contact
Department of Finance in Rockville, MD
at (240) 777-8931
Arts and Entertainment District Tax Credit
Description
This tax credit is available to a
taxpayer against the County property tax imposed on a manufacturing,
commercial, or industrial building that is located in an Arts and Entertainment
District and is wholly or partially renovated for use by a qualifying residing
artist or an arts and entertainment enterprise. This real property tax credit
applies for 10 years, providing the building continues to be used by a
qualifying residing artist or an arts and entertainment enterprise. The tax
credit is based on growth in property assessments. The “base year assessment”
is the real property assessment for the year before any renovation is done. The
credit is based on the increase in the assessment for each of the next 10 years
compared to the base year assessment. The credit itself will be given on the
actual taxes that result from the increase in assessment. Except for properties
allowed an Enterprise Zone Tax Credit, the amount of the Arts and Entertainment
District Tax Credit shall be calculated as follows:
Years 1 through 5: Credit = 80% of the increase in the assessment versus the base year.
Year 6: Credit = 70%
Year 7: Credit = 60%
Year 8: Credit = 50%
Year 9: Credit = 40%
Year 10: Credit = 30% (expires thereafter)
For properties allowed an
Enterprise Zone Tax Credit, the amount of the Arts and Entertainment Tax Credit
is 20% as calculated above, added to the Enterprise Zone Credit.
Authority
Montgomery County
Code, Chapter 52, Article I, Section 52-18L
Effective Date
2002
Contact
Department of Finance in Rockville, MD
at (240) 777-8931
New Jobs Tax Credit
Description
This program consists of the New
Jobs Tax Credit and the Enhanced New Jobs Tax Credit, and benefits businesses
that are planning to increase both their space and staff. A business seeking
either credit must notify the County of its intent to claim the credit before
the expansion.
New Jobs Tax Credit
This is a six-year credit available
to businesses that increase their space by at least 5,000 square feet and their
employee count by at least 25 new jobs. Businesses that are already resident in
the County or that are moving from outside of Maryland
are eligible to apply. The credit is not available to businesses that move to Montgomery
County from another Maryland
county or Baltimore City,
and it is not available to retailers. The 25 new jobs must be permanent
full-time positions and must last for at least 24 months. The new space must be
occupied during the period the business retains the 25 new employees. The
credit is based on the increase in both real and personal property tax
assessments resulting from the business’s expansion. The credit decreases over
six years, as follows:
Years 1 and 2: Credit = 52% of tax attributable to the
assessment increase
Years 3 and 4: Credit = 39%
Years 5 and 6: Credit = 26%
New Jobs Tax Credit recipients
automatically receive an additional State of Maryland
tax credit, which uses the same calculation method. However, the State credit
is given against one of the following taxes:
- Corporate or personal income taxes
- Financial institutions franchise tax
- Insurance premiums tax
Enhanced New Jobs Tax Credit
This 12-year credit benefits
large expansion projects and is available when businesses either:
1.Increase their space by at least 250,000 square feet,and either (A) create 1,250 new
permanent, full-time positions or (B) create 500 new permanent, full-time positions in addition to
retaining at least 2,500 existing permanent, full-time positions, OR
2.Expend at least $150 million to obtain at least 700,000
square feet of new space and employ at least 1,100 individuals, with at least
500 being in new, permanent, full-time positions.
The company must pay all these employees at least 150% of the federal minimum wage.
To qualify for the Enhanced New Jobs Tax Credit, a business must be engaged in one of the following industries:
- Manufacturing, mining, transportation, communications, agriculture, forestry or fishing
- Research, development, testing or biotechnology
- Computer programming, data processing, or other computer-related services
- Central financial, real estate, or insurance services
- Operation of central administrative offices or a company headquarters
- Public utility, warehousing, or business services
A business has six years from the
notification date to create and fill the required number of new jobs and
acquire and inhabit the new space. When this is accomplished, the business will
begin receiving the credit. The Enhanced Tax Credit, like the regular New Jobs
Tax Credit, is given against the local real and personal property tax and is
based on the amount of additional taxes due as a result of the expansion.
Unlike the regular New Jobs Tax Credit, however, the Enhanced Tax Credit is
calculated at the same rate for all 12 years. The rate is 58.5% of the
additional local tax liability.
The State also will give a credit
based on this additional local tax liability. The State credit is 31.5% for
each of the 12 years and is given against the same State taxes as the regular
New Jobs Tax Credit (corporate or personal income taxes, the financial
institutions franchise tax, or the insurance premiums tax). Both the regular
and enhanced State tax credits allow a business to “roll” the credit for up to
five years. This means that if the State tax credit is higher than the amount
of taxes due in any given year, the business can claim the difference for up to
five years. Both tax credits also contain a “recapture” provision that requires
a business to repay the credits if they fail to maintain the job and space
requirements for three years. This provision is applicable to each individual
year, so that if a business maintains the requirements for 14 years, it will
have to repay only the last year of the credit.
Authority
Montgomery County
Code, Chapter 52, Article X
Effective Date
July 1, 1998
Contact
Department of Finance in Rockville, MD
at (240) 777-8931
Brownfield’s Property Tax Credit
Description
The County must allow a tax
credit of 50% of the increased Property Tax Liability (the increase in the
property tax levied on a Qualified Brownfield’s Site resulting from an
increased assessment due to a voluntary cleanup or a corrective action plan for
the Site), for a Qualified Brownfield’s
Site, for each of the 5 tax years immediately following the first revaluation
of a Qualified Brownfield’s Site after completion of a voluntary cleanup or
corrective action plan.
The County must allow a credit
equal to an additional 20% of the increased Property Tax Liability for a
Qualified Brownfield’s Site, if the site is in an Enterprise Zone, or in a
neighborhood designated by the County Council for participation in the
Neighborhood Business Development Program under state law.
A recipient of the property tax
credit under this article is no longer eligible if the recipient of the
property tax credit withdraws from the voluntary cleanup program under Section 7-512(A) or (B) of the Environment Article of the
Maryland Code; or the Maryland Department of the Environment withdraws approval
of a Response Action Plan or a Certificate of Completion under
Section 7-512(E) and (F) of the Environment Article of the Maryland Code.
Authority
Montgomery County
Code, Chapter 52, Article XI
Effective Date
July 1, 1998
Contact
Department of Finance in Rockville, MD
at (240) 777-8931
Conservation Land Tax Credit
Description
Conservation land is defined as
real property that is used to assist in the preservation of a natural area,
used for the environmental education of the public, used to promote
conservation generally, or used as a sanctuary for wildlife. Conservation land
is subject to a perpetual conservation easement donated to a land trust on or
after July 1, 1991; or acquired by a land trust by July 1,
1991, owned in fee by that land trust; and subject to a letter of
intent, agreement, or option agreement to convey the property to a government
agency. The owner of conservation land may receive a tax credit equaling 100%
of any county real property tax imposed on the conservation land, not including
any improvements.
Authority
Maryland Code: TAX-PROPERTY : TITLE 9. PROPERTY TAX CREDITS AND PROPERTY
TAX RELIEF: SUBTITLE 2. STATEWIDE OPTIONAL: § 9-220. Conservation lands
Montgomery County
Code, Chapter 52, Article IX
Effective Date
July 1, 1991
Contact
Department of Finance in Rockville, MD
at (240) 777-8931
Historic Preservation Tax Credit
Description
This tax credit may be granted
against the County real property taxes, based upon the amount expended by a
taxpayer for restoration or preservation of an historic property. A property
must be an historic site designated on the master plan for historic
preservation, or within a historic district designated on the master plan for
historic preservation.
A tax credit will be allowed only
for work which is the subject of an approved historic area work permit; or for
ordinary maintenance expenses, when the amount expended exceeds $1,000.00. A
credit will be approved for exterior work only, and no credit shall be granted
for new construction.
The amount of the credit is equal
to 10% of the amount expended by the taxpayer for the restoration or
preservation of an historic property, up to the amount of County real property
taxes. The credit shall be allowed for the tax year immediately following the
work or any portion thereof is completed, and any unused portion of this tax
credit, may be carried forward for up to 5 tax years, after which the credit
lapses.
Authority
Montgomery County
Code, Chapter 52, Article VI
Effective Date
September 21, 1979
Contact
Department of Finance in Rockville, MD
at (240) 777-8931
Tax Credit for Property Leased by Religious Organizations
Description
This tax credit is granted
against the County real property tax, for that portion of property that is
leased, occupied, and used by a religious organization exclusively for public
religious worship, educational purposes, or office space necessary to support
or maintain public religious worship or educational purposes.
In order to be eligible for the
tax credit, an application must be filed with the Montgomery County Division of
Treasury, by the first day of April, preceding the tax year in which the credit
is to be used.
Authority
Montgomery County
Code, Chapter 52, Article I, Section 52-18I
Effective Date
July 1, 1995
Contact
Department of Finance in Rockville, MD
at (240) 777-8931
Tax Credit for Day Care Provider
Description
A taxpayer may receive a tax
credit against the County real property tax for an improvement on real
property, if the improvement is used exclusively for day care services
(registered family day care home, licensed child care center, licensed day care
center for the elderly, or licensed day care center for the medically
handicapped). Likewise, a taxpayer may receive a property tax credit against
the County real property tax for an improvement on real property owned by a
business with at least 25 employees, if the improvement is used exclusively for
day care services (registered family day care home, licensed child care
center).
The credit is limited to the
lesser of (1) $3,000.00; or (2) the amount of the General
County and Special Area taxes,
attributable to the improvement.
A taxpayer must apply for the tax
credit with the Montgomery County Division of Treasury by April 1, to receive
the credit in the next taxable year.
Authority
Montgomery County
Code, Chapter 52, Article I, Section 52-18E
Effective Date
July 1, 1987
Contact
Department of Finance in Rockville, MD
at (240) 777-8931
Property Tax Credit – Fire Sprinkler Systems
Description
A taxpayer may receive a one-time
real property tax credit against the General County tax for any detached
single-family dwelling unit, and any attached dwelling unit or multi-family
building in which a fire sprinkler system was not legally required to be
installed, if an approved complete automatic sprinkler system that is used for
fire protection is installed on or after July 1, 2000.
The tax credit may not exceed the
lesser of (1) the total cost of installing the sprinkler system; or (2) 50% of
the General County
property tax attributable to the dwelling unit or building.
A taxpayer must apply for the tax
credit in the year the sprinkler system is installed to receive the credit in
that tax year or the following tax year.
Authority
Montgomery County
Code, Chapter 52, Article I, Section 52-18K
Effective Date
July 1, 2000
Contact
Department of Finance in Rockville, MD
at (240) 777-8931
Tax Credit for Spouse of Fallen Law Enforcement Officer or Rescue
Worker
Description
The tax credit is 100% of the
County real property tax on the dwelling of a surviving spouse (who has not
remarried), of a fallen law enforcement officer or fallen rescue worker, if:
1) The dwelling was owned by the fallen law enforcement officer or fallen rescue worker at the time of their death; or if
2) The fallen law enforcement officer or rescue worker or
the surviving spouse was domiciled in the State as of the date of the fallen
law enforcement officer’s or rescue worker’s death, and the dwelling was
acquired by the surviving spouse within 2 years of the fallen law enforcement
officer’s or rescue worker’s death; or if
3) The dwelling was acquired after the surviving spouse
qualified for a credit for a former dwelling under 1) or 2) above, to the
extent of the previous credit.
Application for the tax credit
should be submitted to the Division of Treasury by April 1, to receive the tax
credit for the next taxable year.
Authority
Montgomery County
Code, Chapter 52, Article I, Section 52-18N
Effective Date
July 1, 2003
Contact
Department of Finance in Rockville, MD
at (240) 777-8931
Tax Credit - Home Computer Telecommuting Incentive
Description
An employer may receive an annual tax credit against
the County personal property tax for the purchase of a new home computer or new
laptop computer to establish a new off-site employee workstation, if the
computer is purchased after December 31, 2005. The amount of the tax credit
must not exceed 50% of the cost of each new computer. The aggregate tax credit
allowed for a taxpayer, in any tax year, must not exceed $2,000.00.
The Department of Finance must grant each tax credit
in the order in which the Department receives the applications for the credit.
The amount of credits allowed in each calendar year must not exceed:
1)$100,000 in 2006
2)$175,000 in 2007
3)$250,000 in 2008
Starting in 2009, the total
amount of credits allowed in each future year, must be set by the County
Council, if the Council takes no action the amount allowed for the prior year
also applies to that year.
An employer is eligible for and must apply for the
tax credit within 12 months after a new computer purchase, and the credit must
be applied in the tax year of the purchase, or the following tax year. The
employer must show that:
1) The computer will be used for telecommuting.
2) Affirm that the employee works at home at least 78 days per calendar year.
3) Document the date of purchase and the cost of the computer.
Authority
Montgomery County
Code, Chapter 52, Article I, Section 52-18O
Effective Date
January 1, 2006
Contact
Department of Finance in Rockville, MD
at (240) 777-8931
Property Tax Credit – Nonprofit Swim Clubs
Description
A nonprofit swim club is eligible for a real
property tax credit against the general County tax and special service area
taxes, provided it uses its facilities exclusively to provide a recreational
outlet for a local community. In the year for which the credit is applied, the
nonprofit swim club must provide the County with documentation that shows it is
a nonprofit entity, and must certify to the county that its facilities are used
solely for the purposes stated. The required documentation to receive the tax
credit is as follows:
1) A copy of its Articles of Incorporation
2) current Certificate of Good Standing from the State of Maryland
Authority
Montgomery County
Code, Chapter 52, Article I, Section 52-18P
Effective Date
2006
Contact
Department of Finance in Rockville, MD
at (240) 777-8931
Property Tax Credit – Energy and Environmental Design
Description
This tax credit, introduced as the “Green
Building” tax credit, may be
granted against the General County
real property tax and special service area taxes, based upon a building
achieving one of ten qualified ratings for energy efficient buildings. The
following are qualified ratings according to three rating systems: “LEED-CS”
means the Leadership in Energy and Environmental Design - Core and Shell rating
system administered by the US
Green Building Council (USGBC), “LEED-EB” means the Leadership in Energy
and Environmental Design - Existing Building rating system administered by the
USGBC, and “LEED-NC” means the Leadership in Energy and Environmental
Design - New Construction rating system administered by the USGBC. Also
qualifying is a building that achieves an energy and environmental design
standard that the Director of the Department of Permitting Services finds is
equivalent to a gold or platinum rating from the USGBC for LEED-NC, LEED- CS,
or LEED-EB. The credit is granted against the county taxes as follows:
For a
covered building, which is defined as a newly constructed or extensively
modified non-residential or multi- family residential building that has or will
have at least 10,000 square feet of gross floor area:
A) 25% of the property tax owed on the building for 5 years, if
the building achieves a gold rating for LEED-NC or LEED-CS or an equivalent
standard; or
(B) 75% of the property tax owed on the building for 5 years, if
the building achieves a platinum rating for LEED-NC or LEED-CS or an equivalent
standard;
(C) 10% of the property tax owed on the building for 3 years, if
the building achieves the gold rating for LEED-EB or an equivalent standard;
and
(D) 50% of the property tax owed on the building for 3 years, if
the building achieves the platinum rating for LEED-EB or an equivalent standard.
For any other building, the amount of the credit is:
(A) 25% of the property tax owed on the building for 5 years, if
the building achieves a silver rating for LEED-NC or LEED-CS or an equivalent
standard;
(B) 50% of the property tax owed on the building for 5 years, if
the building achieves a gold rating for LEED-NC or LEED-CS or an equivalent
standard;
(C) 75% of the property tax owed on the building for 5 years, if
the building achieves a platinum rating for LEED-NC or LEED-CS or an equivalent
standard;
(D) 10% of the property tax owed on the building for 3 years, if
the building achieves the silver rating for LEED-EB or an equivalent standard;
(E) 25% of the property tax owed on the building for 3 years, if
the building achieves the gold rating for LEED-EB or an equivalent standard;
and
(F) 50% of the property tax owed on the building for 3 years, if
the building achieves the platinum rating for LEED-EB or an equivalent
standard.
The tax credit must be applied for within 1 year
of the building being certified as a high energy performance building.
During any fiscal year granted to:
All buildings receiving the credit must not exceed $5 million.
Buildings that achieve a silver rating or equivalent standard must not exceed $1.5 million.
Buildings that achieve a gold rating or equivalent standard must not exceed $2.5 million.
The Finance Department must grant
the credits in the order in which it receives complete applications, a complete
application that, if granted would cause any of the limits, above, to be
exceeded, must be granted in the next fiscal year or years based on the order
in which the Department of Finance received the application.
Authority
Montgomery County
Code, Chapter 52, Article I, Section 52-18Q
Effective Date
March 17, 2008
Property Tax Credit – Renewable Energy (Renewable Energy
Devices)
Description
An owner of an owner-occupied residential property who installs a solar or geothermal device
may receive a real property tax credit against the County tax on the property. The credit is
limited to the lesser of:
1) 50% of the eligible costs of the system, or
2) $5,000 for a device to heat or cool a structure; $5,000 for a device to generate
electricity in a structure; $1,500 for a device to provide hot water in a structure.
Any Geothermal or Solar energy device must meet safety and performance standards set by a
nationally recognized testing laboratory for that kind of device, in order to receive the tax credit.
In order to receive the tax credit, a taxpayer must submit a completed application to the
Montgomery County Department of Finance. The application must:
1) Demonstrate that the taxpayer is entitled to the tax credit
2) Include a certification from the Montgomery County Department of Permitting
Services, indicating that the device is a qualifying solar or geothermal device, and has
been properly installed. The Department of Permitting Services must accept a
certification by another government agency, including a municipality, which certifies
that the device has been properly installed.
The initial annual funding for this credit was $250,000 in levy year 2008, but increased by
$150,000 on December 10, 2009 (Bill 39-09) effective levy year 2009. As a result, during any
fiscal year, the total credits granted for geothermal or solar devices must not exceed $400,000.
Credits must be granted in the order in which the Department of Finance receives completed
applications. Any completed application received after the $400,000 limit has been reached in
the current fiscal year must be granted in the next fiscal year or years based on the order in which
the application is received. The amount of credit issued in any tax year must not exceed the
amount of County property tax levied on the property in that tax year. Any approved credit
amount not issued in that tax year may be carried over for an additional two years.
Authority
Montgomery
County Code, Chapter 52,
Article I, Section 52-18R
Effective Date
July 1, 2008
Contact
Department of Finance in Rockville, MD
at (240) 777-8931
Property Tax Credit – Renewable Energy (Energy Conservation
Devices)
Description
An owner of an owner-occupied residential property who installs an energy conservation device
may receive a real property tax credit against the County tax on the property. In any fiscal year,
the total amount of credit allowed under this section for all conservation devices is limited to
$250 per property.
In order to receive the tax credit, a taxpayer must submit a completed application to the
Montgomery County Department of Finance. The application must demonstrate that the device
for which a credit is sought is an eligible energy conservation device, defined as a device that
reduces the demands for conventional fuels, or increases the efficiency of these fuels; and that
the device meets safety and performance standards set by a nationally recognized testing
laboratory for that kind of device. An energy conservation device does not include a standard
household appliance.
The initial annual funding for this credit was $250,000 in levy year 2008, but decreased by
$150,000 on December 10, 2009 (Bill 39-09) effective levy year 2009. As a result, during any
fiscal year, the total credits for energy conservation devices must not exceed $100,000. Credits
must be granted in the order in which the Department of Finance receives completed
applications. Any completed application received after the $100,000 limit has been reached in
the current fiscal year, must be granted in the next fiscal year or years based on the order in
which the application is received.
Authority
Montgomery
County Code, Chapter 52,
Article I, Section 52-18R
Effective Date
July 1, 2008
Contact
Department of Finance in Rockville, MD
at (240) 777-8931
Residential Real Property Tax Deferral - General
Description
A taxpayer may defer payment of County property
taxes due on residential real property used as the owner’s principal residence.
The amount of taxes that may be deferred for any one year is the amount that
County taxes due exceeds the amount of County property taxes paid in the prior
taxable year. Taxes that are eligible for deferral are the General County tax and Special Service Area
taxes.
A taxpayer is eligible for a deferral if:
1) The gross income or combined
gross income of all individuals who actually reside in the dwelling did not
exceed $120,000 for the preceding calendar year.
2)The owner, or at least one of the
owners, must reside in the dwelling as their principal place of residence, and
must have done so for at least 5 years.
Interest accrues on the deferred taxes at a rate set
annually by the County that does not exceed the prime lending rate. The annual
interest rate set by the County applies to any tax deferred that year,
regardless of the year when the tax was first deferred (i.e., the new interest
rate is applied to all deferred taxes). The accumulation of deferred taxes and
accrued interest must not exceed 50% of the full cash value of the property.
Authority
Montgomery County
Code, Chapter 52, Article I, Section 52-18F
Contact
Department of Finance in Rockville, MD
at (240) 777-8931
Effective Date
July 1, 2005
Payment in Lieu of Taxes (PILOT) Exemptions
Description
The purpose of the County Payment in Lieu of Taxes (PILOT) exemption is to support affordable housing, which is one of the County’s missions. Local governments, when authorized by State Law, negotiate agreements with rental property owners to lower the cost of County real property and special area taxes. In return, a rental property owner commits to provide affordable housing to low-income residents. Following the legal, budgetary, and procedural review of a negotiated PILOT agreement, the County Department of Housing and Community Affairs (DHCA) recommends a PILOT to the Director of Finance for approval. The Department of Finance computes the fiscal impact and, subject to the guidelines and an annual funding limit, either approves or denies the recommended PILOT. This exemption is applied to the real property tax bills once the agreement is executed. The County Council sets the maximum annual funding amount for PILOT programs for a 10-year period only for properties that are not owned or controlled by the Housing Opportunity Commission (HOC).
Authority
Maryland Code: § 7-501, § 7-502, § 7-503, § 7-505, § 7-506-1 of the Tax – Property Article; and § 1-104 of Article 44A – Housing Authorities
Montgomery County Code, Chapter 52, Article I, Section 52-18M
Contact
Montgomery County Department of Housing and Community Affairs (DHCA) in Rockville, MD at (240) 777-3693 for PILOT related questions.
Montgomery County Treasury in Rockville, MD at (240) 777-8994 for property tax billing related questions.
Effective Date
1979 (first County non-HOC PILOT agreement)
Property Tax Exemptions
Description
There are numerous types of
Property Tax Exemptions available through the State, some of the most used ones
include exemptions for: charitable or educational properties; dwelling house of
blind individual, surviving spouse; dwelling house of disabled veteran,
surviving spouse; government properties; and properties owned by religious
organizations. A full list of available exemptions is included on the following
pages.
Authority
Maryland Code: TAX-PROPERTY: TITLE 7. PROPERTY TAX EXEMPTIONS
Effective Date
Varies by Exemption
Tax Exemption List
Subtitle 2. General Property Tax Exemptions.
7-201.Cemeteries and mausoleum companies
7-202.Charitable or educational purposes
7-203.Chesapeake Bay Foundation
7-204.Religious groups or organizations
7-205.Community water systems
7-206.Continuing care facility for aged
7-207.Dwelling house of blind individual; surviving spouse
7-208.Dwelling house of disabled veteran; surviving spouse
7-209.Fire companies and rescue squads
7-210.Government property
7-211.Interest in government property
7-211.1.Property used to heat, cool, or generate electricity for State
7-212.Gunpowder youth camps
7-214.Historical societies; war memorials
7-215.Housing authority property
7-216.Izaak Walton League
7-217.Maryland Ornithological Society, Inc.
7-218.Nature Conservancy
7-219.Personal property - Agricultural products
7-220.Same - Aircraft
7-221.Same - Bank property
7-221.1.Same - Property used in processing deposits or loans
7-222.Same - Business stock property
7-223.Same - Farm implement property
7-224.Same - Livestock property
7-225.Same - Manufacturing property
7-226.Same - Raw materials and products property
7-227.Same - Property located in a residence
7-228.Same - Savings and loan property
7-229.Same - Tools of mechanics or artisans
7-230.Same - Vehicles
7-231.Same - Vessels
7-232.Same - Voting system
7-233.Scouts
7-234.Veterans' organizations
7-235.Maryland Vending Program for the Blind
7-236.Refueling equipment or machinery
7-237. Machinery or equipment used to generate electricity, steam for sale, hot or chilled water for sale
7-238.Computer software and related documentation
7-239.Certified coal pollution control facility; coal waste disposal power project
7-240. Property of nonprofit organization engaged in containment of coastal and tidal oil spills
7-241.Charles County Planning Commission
Subtitle 3. State Property Tax Exemption
7-301.Personal property - State property tax exemption
7-302.American Association of Blood Banks, Inc.
7-303.Licensed public airport on privately owned land
7-304.Land trusts
7-305.Harford Land Trust
Subtitle 4. County Exemptions - Mandatory
7-401.Rolling stock property
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