Competitive Commercial Tax Credit

About the competitive commercial tax credit 

Qualifying projects: 

• May receive a state income tax credit equal to 20% of eligible rehabilitation expenses (capped at $5 million annually)
• Must have eligible rehabilitation expenses greater than the adjusted basis value of the structure or $25,000
• Must benefit an income-producing or commercial property, which can include properties owned and operated by nonprofits
• Must meet all eligibility requirements described in the "Eligibility" section below 

Projects in a qualified Opportunity Zone (1 or 2) may be eligible for additional state tax credits.  

This page provides an overview of key steps in the process. For complete information about requirements, please review the application instructions. 

Start with a consultation 

Applicants should contact tax credit staff early in the project planning process, before beginning their applications.   

Early communication and site visits allow the Maryland Historical Trust (MHT) to:  

• Provide useful guidance
• Identify potential design issues, site or building challenges
• Advise on how to complete a successful application that meets the goals of the project and the program.   

Please email [email protected] to discuss your project and/or schedule a site visit.  

Timeline 

Applications are accepted by August 31 each year, but applications are posted at different times, depending on the funding cycle. Check this web page and follow us on social media for updates. 

Eligibility 

Applications must meet all eligibility requirements to receive a tax credit, and all work must be approved by MHT for consistency with the Secretary of the Interior’s Standards for Rehabilitation. 

Eligible applicants 

Any person or entity (including individuals, businesses, and nonprofit organizations) may apply for a competitive commercial tax credit. Applicants must: 

• Undertake an eligible rehabilitation project for an eligible property (see details below), and
• Own the property or have the permission of the property owner to proceed 

Eligible properties 

To be eligible for the tax credit, a building must be: 

1. A certified historic structure, and 
2. At least one of the following: 
3. Primarily income-producing, or 
4. Rehabilitated for a commercial use (which can include use by nonprofits), or
5. Rehabilitated as part of a development project to be sold to a homeowner 

A certified historic structure is a property that is:  

• Individually listed in the National Register of Historic Places, or
• A contributing resource in a National Register Historic District, or
• Locally designated (as an individual landmark or contributing structure) and determined by MHT to be eligible for the National Register  

Some properties located in (and certified as contributing to) a Maryland heritage area may be eligible for this program. If you are considering applying for one of these properties, please contact staff.   

Eligible projects 

To be eligible for the tax credit, your project must: 

• Not begin until after you pay the application fee and receive approval for your Part 2 Application, which describes your proposed scope of work. 
• Note: this requirement is waived if Part 2 of a federal tax credit was approved by the National Park Service prior to the state application deadline. However, any work started prior to MHT's Part 2 approval will not be eligible for the state tax credit.
• Qualify as a "substantial rehabilitation." This means the project must have eligible rehabilitation expenses greater than the adjusted basis value of the structure or $25,000. 
• Repair or change a building so it is useful and efficient while protecting its historic, architectural, or cultural features. 

All work must comply with the Secretary of the Interior’s Standards for Rehabilitation.  

Please contact MHT with any questions about eligible expenses before you begin your application.   

Using the state tax credit with federal and local tax credits 

Property owners may use the state historic tax credit with federal and local historic tax credits, if local tax credits are available and the project meets the eligibility requirements for all programs. Federal applications are reviewed by MHT in coordination with the National Park Service and should be submitted simultaneously for a streamlined review. However, MHT review is independent of local review and may not be waived or substituted with local tax credit approval.  

Please contact your county or municipality for more information about local tax credits.

Additional requirements for projects receiving $1 million or more 

Under Maryland law, you must meet corporate diversity requirements to receive state tax credits of $1 million or more. 

• How to qualify: Show diversity in your leadership OR through a mission that supports underrepresented communities.
• What to file: Include a Corporate Diversity Addendum - PDF with your SDAT Annual Report OR an exemption affidavit with your Part 3 Application.
• Who is exempt: These rules do not apply to sole proprietors, single-member LLCs, or certain family-owned and small businesses. 

Note: You cannot receive your tax credit until you certify your compliance or exemption.   

Three-part application process

The tax credit application has three parts: 

1. Part 1 describes the property and its historic significance for evaluation by MHT.
2. Part 2 describes the proposed rehabilitation work for approval.
3. Part 3 documents the completed project for final certification. 

To get started, read the competitive commercial application instructions and all supporting materials. Applicants are encouraged to contact MHT early in the planning process.   

MHT reviews each part of the application, including documentation of the completed project (Part 3), for eligibility prior to approval.