The current legislative roster for 2020 does not specifically reference manufacturers. Below is a list of ideas originating from manufacturers across Maryland.

Please review the ideas and offer your feedback for inclusion in discussions about potential legislation favoring manufacturers. Please also contact the This email address is being protected from spambots. You need JavaScript enabled to view it. if you have new and or different ideas for legislation in support of the manufacturing industry. We will compile a list and get it into the hands of as many legislators as possible. 

All recommendations for consideration are limited to companies engaged in manufacturing, distribution, logistics, and fulfillment. All suggestions require that the company full time employee head count remain at or increase from current levels for the entire period. The maximum size of the company to qualify would be $50m (or some number) in annual revenue when the program starts.

The legislative ideas are not in any specific order.

Growth Tax Credit

Caps the companies tax burden at the current amount for 3 – 5 years provided the company leaves the money in the company. Encourages companies to increase their tolerance for risk and focus on growth.

The following conditions must be met.

1. Company must have 10 – 200 full time employees and the company may not fall below those employment numbers during the credit period.

2. S Corp or LLC

Example – A $10m business that invests in growth of their business will be taxed at lesser of actual rate or $10m rate. If that company grows to $15m during the period, the total corporate taxes paid will remain at the $10m rate. 

This program encourages business owners to increase their tolerance for risk and to invest in new markets, new technologies, and new people.  

S Corp, LLC Incentive to Invest in Maryland

Profits left in the corporation for use as working capital, capital expenditures and incremental growth will not be taxed for a period not to exceed 2 years at which time the company can choose to re-register. This money must remain active. Normal taxes will apply if the money is transferred for any reason. This will encourage business owners to keep their money in Maryland instead of pulling out and moving it to states like FL or DE. As information – it is increasingly difficult for manufacturers in Maryland to obtain loans from traditional banking sources. As banks grow larger their appetite for small manufacturers decreases sharply and their business practices regarding lines of credit become almost predatory. This incentive encourages manufacturers to leave their money in play as opposed to being taxed at the personal rate with no return.

Most small and medium size manufacturers in Maryland are S Corporations. At the end of the year their working capital for the next year is taxed as profits. The result is an immediate loss of cash flow.

Startup Incentive

For new first time businesses with 1 - 15 FTE’s whose primary owner is a full time active employee and who demonstrate a capital equipment investment of $5m or more, corporate taxes and employer payroll taxes will be forgiven for the first two years. This will increase cash flow critical during the first 24 months of operation with a minimal fiscal note to Maryland.

Made in Maryland

For companies who can demonstrate that their product was manufactured in Maryland using 60% of total labor from Maryland and 60% of components/sub-assemblies manufactured in Maryland a designation of Made in Maryland will be available on a per product basis. This indicates the product is made in America without infringing on the ITA designation Made in USA. Most products simply cannot meet the Made in USA requirement. This does not require legislation but does require an act by the Governor.