SALISBURY – Wicomico County is looking to relieve frustration among businesses by exempting manufacturing equipment under certain conditions when determining a company’s assessed value.
The Wicomico County Council introduced legislation Tuesday to exempt from county property taxation manufacturing equipment under certain conditions by reducing the percentage of the assessed value subject to county property tax from 100 percent to 0 percent.
Director of Administration Wayne Strausburg said County Executive Rick Pollitt has determined that the process for granting an exemption for tax on manufacturing equipment is an impediment to the economic development of Wicomico County.
The current code application for exemption states, “any individual, firm or corporation requesting an exemption pursuant shall file an application, under oath, with the Council Administrator of Wicomico County on or before October 1 of the initial taxable year for which the exemption is sought.”
According to Finance Director Andy Mackel, while this seems like a straightforward process, many small businesses unfamiliar with Maryland processes are confused and frustrated when they discover that while the state does not tax personal property, counties may and Wicomico County does.
Further, the county’s requested deadline has led a few companies in recent times to lose out on the exemption for a full year because they missed the filing deadline.
Pollitt wants to change the process because Wicomico County’s current exemption application process places it at an extreme disadvantage because the State Department of Assessments & Taxation web page shows no exemption. Somerset and Worcester counties are the only other counties that do not show 100 percent exemption on the state web site.
“So we are one of three counties in the state,” Mackel said. “So that is a significant detractor in getting new businesses, particularly manufacturing businesses to come here.”
As a result, a potential business will end the consideration of Wicomico County before anyone can tell them that the county does offer a 100-percent exemption of manufacturing equipment.
“So this feature of our code has caused confusion and consternation of local businesses that may not be aware of that requirement and it has frustrated them in the past,” Mackel said.
Pollitt’s recommendation proposes to enhance Wicomico County’s competitive position and streamline the business development process by eliminating the current application process.
There is currently about 57 business with county-approved exemptions. These existing exemptions reduce total revenue from personal property tax by roughly $1,300,000. This will not be affected by the proposed change.
There are however about 17 companies who, for reasons unknown, have never applied for the manufacturing exemption. When this change takes effect, these companies will automatically receive an exemption. As a result, they will pay roughly $27,000 less in personal property tax to the county.
“We believe that is a very small price to pay for the future benefit of improving our competitive position,” Mackel said.
The County Council voted to move forward with the introduction of the legislative bill. A public hearing will be held April 16 at 10:30 a.m. If passed, the amendment will take effect by the start of Fiscal Year 2014.