- State of Maryland Regulations
Title 24, Department of Business and Economic Development
Subtitle 05 Economic Development Chapter 26
Arts and Entertainment Districts
Authority: Article 83A, 2-105(b) and 4-701-4-703
Annotated Code of Maryland
Click Here to learn more about Maryland Title 24.
- Annotated Code of Maryland
Article 83A Department of Business and Economic Development
Title 4. Division of Tourism, Film and the Arts
Subtitle 7-Arts and Entertainment Districts
Click Here to learn more about Maryland Article 83A of Title 4.
2005 Changes to Arts and Entertainment Districts Statute
During its 2005 legislative session, the General Assembly of Maryland enacted several changes to the statutes relating to Arts and Entertainment districts in Maryland, and Governor Ehrlich signed them into law. The changes tend to broaden the availability of the incentives in the districts. The amended statutes, with the changes marked, are set forth below the descriptions of the changes.
1. Definition of “qualifying residing artist”. This definition in Article 83A, 4- 701(a)(5) previously required a “qualifying residing artist” to own or rent residential real property within the arts and entertainment district where the artist conducts a business. The change to subparagraph (i) allows the artist to own or rent residential real property anywhere in the county where that arts and entertainment district is located. The change to subparagraph (ii) clarifies that the applicable artistic work shall have been created or executed within the arts and entertainment district.
These changes are effective June 1, 2005.
2. Real Property Tax changes. The changes to Article-Tax-Property 9-240(b)(2) broadens the local property tax credit to be applied to new construction at the site of manufacturing, commercial or industrial building in a district as well as to renovation at that site. The property tax credit may apply to either a renovation that includes some new construction, such as an additional floor or wing, as well as to a totally new building constructed on the site of a former manufacturing, commercial or industrial building that needed to be torn down for practical reasons.
The statute also adds the words “to be capable” for use by a qualified residing artist or an arts and entertainment enterprise. The State Department of Assessments and Taxation, which administers property taxes and credits, will determine determine whether a property has been clearly designed and constructed or renovated for use by artists or arts and entertainment enterprises. If SDAT staff determines that the property was intended for such a use, the building need not actually be completely used by artists or arts and entertainment enterprises. For example, if a developer renovates a building into artist’s lofts that provide extra-large windows for natural light and extra space for artistic endeavors, and an effort is made to lease the apartments to artists, the credit would be available to the developers for all the qualifying apartments even if some are leased to non-artists.
These changes are effective to all taxable years beginning after June 30, 2005. Future local governments applying for the credit will have to grant the property tax credit on qualifying new construction as well as on renovation. Whether or not existing districts permit the tax credit on new construction will likely depend on the language of their local resolution approving the property tax credit.
3. Income Tax change. The change to Tax – General Article, 10-207(v)(2) clarifies that only income derived within an arts and entertainment district from the creation or execution of an artistic work within that district is eligible for the subtraction modification. It appears that this clarification was added to make it plain that even if an artist owns or rents residential real property outside the district but in the county where the district is located, as will soon be permitted, the artist must both write, compose or execute the work and derive the income from the publication, production, or sale of an artistic work within the district to qualify for the subtraction modification.
This change is applicable to all taxable years beginning after December 31, 2004.
note: The above explanation was copied from information provided by the representative of the Maryland Department of Tourism. It is here for general information and cannot be considered an official document. For specific law or legal requirements, the individual is responsible to verify such with their personal attorney or accountant.
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