Property Tax - Credit for Commercial Buildings Rented to Small Businesses
HB0840 authorizes Baltimore City and county or municipal governments to create a local property tax credit for commercial buildings that are rented, or rented-to-own at fair market value, to small businesses. The credit may be offered only for buildings located in designated arts and entertainment districts or in Main Street Maryland communities. The bill does not itself create a statewide credit; instead, it gives local governments permission to enact one by local law.
The bill also gives local governments flexibility to set the credit’s amount and duration, establish additional eligibility rules, create application procedures, and adopt any other provisions needed to administer the credit. It takes effect June 1, 2026, and applies to taxable years beginning after June 30, 2026.
HB0840 would amend the Tax-Property Article by adding a new section authorizing local property tax credits for qualifying commercial buildings in specified revitalization areas. It would affect county and municipal property tax systems, especially in Baltimore City and localities with arts and entertainment districts or Main Street Maryland designations, by allowing them to use tax policy to encourage leasing to small businesses. The bill does not mandate any tax credit or change state tax rates; it creates local enabling authority and leaves implementation details to local governments.
Based on the bill’s framing and the absence of recorded votes or committee testimony in the provided materials, the measure appears to be a targeted economic development bill with a generally supportive policy posture. Its focus on small businesses, commercial occupancy, and downtown or neighborhood revitalization areas suggests it is intended to be viewed favorably by local governments and business development advocates. No explicit opposition is reflected in the available record.
The main point of contention is likely to be whether local governments should forgo property tax revenue to subsidize commercial landlords in hopes of supporting small-business tenancy. Potential concerns include the fiscal impact on counties and municipalities, whether benefits will reach small businesses directly or primarily aid property owners, and how eligibility should be defined and administered. Another possible issue is the bill’s geographic limitation to arts and entertainment districts and Main Street Maryland communities, which may be seen as too narrow by some stakeholders and too broad or costly by others.