Property Tax Exemption and Payment in Lieu of Taxes - The Hagerstown Multi-Use Sports and Events Facility, Inc.
Summary
SB596 creates a property tax exemption for property owned by The Hagerstown Multi-Use Sports and Events Facility, Inc. when the property is used primarily for public social, recreational, and entertainment purposes. It also authorizes the facility to negotiate a payment in lieu of taxes (PILOT) with Washington County or the City of Hagerstown for all or part of the facility, even though the property is otherwise exempt from property tax.
The bill also revises Washington County’s existing property tax credit program for business entities that invest in real property and create jobs. It raises the thresholds for qualifying investments and job creation, changes the definitions and eligibility rules for new permanent full-time positions, and adjusts the percentage and duration of the credit for different categories of businesses. The changes generally make the credit more targeted to larger investments and larger job-creation commitments, while also modifying the schedule of benefits over time.
Impact
The bill amends Maryland’s Tax-Property Article by adding new sections for the Hagerstown facility exemption and PILOT authority, and by revising Section 9-323(f) governing Washington County property tax credits for business investment and job creation. It affects county property tax administration, the tax liability of the Hagerstown Multi-Use Sports and Events Facility, Inc., and the eligibility of businesses seeking county property tax credits for new, renovated, or expanded premises. The act takes effect June 1, 2025, and applies to taxable years beginning after June 30, 2025.
Sentiment
The bill appears to have been broadly supported. The recorded votes show unanimous or near-unanimous passage in the Senate and House, with no recorded opposition in the Senate votes and only one nay in the House vote. The absence of committee transcript material limits insight into debate, but the voting history suggests the measure was viewed favorably as a local economic development and facility-support bill.
Contention
The main policy issues are the scope and generosity of the tax benefits. For the Hagerstown facility, the bill grants a full property tax exemption but preserves flexibility for negotiated PILOT payments, which may raise questions about local revenue impacts and the balance between public support and private benefit. For the Washington County credit, the higher investment and job thresholds, along with revised credit percentages and durations, could be seen as either strengthening accountability or making the incentive harder to use. Any contention would likely center on whether the tax incentives are sufficiently tied to measurable economic development outcomes and whether local governments should retain discretion over implementation.