Maryland · Geographic / Investment · MD-ONE-001
One Maryland Tax Credit
Publication revised September 24, 2026. Sourcebook page 139.
Credit amount / calculation
Up to $5 million based on eligible project costs, subject to qualification and use/refund rules.
Business fit and eligible activity
Qualifying Tier 1 county projects with jobs and investment can earn a large credit. Qualified investment or approved project activity; confirm eligible property, location and taxpayer type.
Eligibility and practical use
For a mill owner, the practical question is what property the statute treats as qualified investment. Production machinery is usually the first place to look; buildings, electrical work, software, mobile equipment, and used machinery require closer reading. Logging equipment deserves a separate eligibility check because mobile harvesting property may be treated differently from machinery used at a manufacturing site. Check the approval deadline before signing a purchase order or contract. A binding commitment made too early can disqualify a project.
Illustrative business benefit
A sawmill is replacing a headrig and adding scanning, material handling, and electrical controls in a project of roughly $2 million. The credit calculation would be based only on the costs the program recognizes as qualified investment. Before issuing purchase orders, the mill should obtain a written view on whether installation, electrical work, used equipment, and software are included.
Timing / first action
Seek approval before starting the overall project, including site work or construction. Contact the administering agency and secure the required approval before the project is publicly or contractually committed.
Official sources
- commerce.maryland.gov — Business Tax Credits (commerce.maryland.gov)
Related programs
Historic Revitalization Tax Credit
Percentage of qualified rehabilitation expenditures
Certified historic mills and industrial properties can qualify.
Job Creation Tax Credit
Generally
Forest-products manufacturers adding qualifying Maryland jobs can receive per-job credits.
Research and Development Tax Credit
10% of eligible excess Maryland research
Maryland manufacturers can apply annually for a capped state credit, production, routine quality control and an equipment purchase alone do not qualify.
Clean Electricity Investment Credit (Internal Revenue Code §48E)
Generally
Potentially relevant when a forest-products facility owns qualifying zero-emission generation or energy-storage property.
Clean Electricity Production Credit (Internal Revenue Code §45Y)
Production-based
Alternative to the investment credit for owners/operators of qualifying clean-electricity facilities; potentially relevant to qualifying on-site generation.
Credit for Increasing Research Activities (Internal Revenue Code §41)
Regular research-credit method
A sawmill, secondary manufacturer or biomass business can qualify when it performs genuine technological experimentation to improve a product or process.