BRUNSWICK, Md. (PRWEB) January 16, 2019
Entrepreneurs, officials, and residents with an interest in Brunswick’s economic future should pay close attention to Gov. Larry Hogan’s announcement regarding Maryland’s 149 Opportunity Zones. On January 3, the governor outlined an ambitious $56.5 million spending program to give additional incentives to businesses who locate in an Opportunity Zone. Created by federal tax reform in December 2017, Opportunity Zones are designed to attract investment to economically-depressed and struggling communities. Downtown Brunswick was designated an opportunity zone by state and local officials in April 2018.
Gov. Hogan’s plan contains incentives from a variety of sources and would complement federal Opportunity Zone benefits and county-level perks through the Maryland Enterprise Zone program.
Two businesses have already taken notice. Smoketown Brewing Company, the craft brewery that opened in 2015 after refurbishing downtown’s 1948 fire hall, became the first Enterprise Zone-certified business in Brunswick in 2017. This allows owner Dave Blackmon to receive tax credits on real property and income as he works to expand brewing capacity and open a second-floor event space. “I’m looking forward to applying the tax break for the 2019 tax year, having met the requirements of the Enterprise Zone designation to spend at least $100,000 on my space, which I’ve done preparing Cannon’s for its debut.”
Smoketown has also benefitted from the Community Legacy grant program offered by Brunswick Main Street, receiving several awards for façade and interior improvements.
Mehdi Tehranchi, founder of the start-up software company iyotee, inc., has been vocal about locating the headquarters for his first product, the free, private social networking app called Go2s, in Brunswick in part because of its Opportunity Zone designation. Quoted in a recent Washington Business Journal article, Tehranchi pointed out the advantages of tax breaks for helping spur economic activity and promised that, “In return, Brunswick businesses will be exempt from paying Go2s for its services” as iyotee moves towards launching its second product, a business dashboard aimed at giving small businesses better access to the lucrative online advertising market.
Tehranchi was quick to point out other virtues of his decision to locate in Brunswick, “Brunswick works for Go2s because our goal is to create a community-driven social network and Brunswick has all the things one needs to achieve this. The tax incentives are the cherry on the top of the sundae and locating in an Opportunity Zone is another way for Go2s to adhere to its core mission of fostering strong, local connections.”
If you are interested in learning more about the Opportunity Zone or Enterprise Zone programs, go to: https://www.irs.gov/newsroom/opportunity-zones-frequently-asked-questions
Brunswick Main Street will be hosting an informational session about economic incentives for downtown Brunswick in the near future.
ECONOMIC BENEFITS FOR OPPORTUNITY & ENTERPRISE ZONES
Federal Opportunity Zone Benefits:
The Opportunity Zone program allows for the formation of a Qualified Opportunity Fund, an investment vehicle that is set up as either a partnership or corporation, for investing in eligible property in a qualified Opportunity Zone.
- Investment profits that are reinvested in a Qualified Opportunity Fund defer capital gains tax.
- Taxes owed on profits generated from the Qualified Opportunity Fund are reduced by 10% after 5 years, 15% after 7 years, and eliminated if the investment has been held for 10+ years.
Maryland Opportunity Zone Benefits:
- “More Opportunities for Marylanders Act of 2019” would extend tax credits and offer state property tax exemptions and fee waivers
- $3 million would be invested in a new “Opportunity Works” job training program
- $16 million would be invested in a new Maryland Technology Infrastructure Fund to support development of Maryland’s tech industry
- Additional funding would be allocated for the Department of Housing and Community Development for affordable housing projects, small business loans, and acquisition, demolition, and redevelopment of derelict buildings
Maryland Enterprise Zone Benefits:
Businesses meeting certification criteria are eligible to receive:
- A one-time $1000 income tax credit for each qualified new employee filling a newly created position.
- A stepped, three-year income tax credit ($3,000 first year, $2,000 second year, $1,000 third year,) for each qualified new economically-disadvantaged employee.
- A stepped, ten-year tax real property tax credit on a portion of investment in real property expansion, renovation or capital improvement (80% the first five years and decreasing 10% annually for the subsequent 5 years).