Maryland-Mined Coal Tax Credit

Description:

A co-generator, a public service company, or an electricity supplier that purchases coal mined in Maryland on or before December 31, 2020 may be eligible for a tax credit.

The credit may be taken against corporate income tax, personal income tax or public service company franchise tax. The same credit may not, however, be applied to more than one tax type.

Sole proprietorships, corporations and pass-through entities, such as partnerships, subchapter S corporations, limited liability companies and business trusts may claim the tax credit.

To qualify for the credit:

The business must purchase Maryland-mined coal during the tax year. To take the credit against the income tax, an application must be submitted to the State Department of Assessments and Taxation (SDAT). An electricity supplier must not have been an electric company before July 1, 1999, and both co-generators and electricity suppliers must not be subject to the public service company franchise tax. The total amount of credits approved by SDAT for the tax years 2007 and later are limited. In addition, $2,250,000 of the credits must be reserved for Maryland-mined coal for use in a Maryland facility.

How the credit is calculated:

The credit is $3 per ton of Maryland-mined coal purchased during the tax year, but cannot exceed the credit amount approved by SDAT.

If the credit is more than the tax liability, the unused credit may not be carried forward to future taxable years.

Documentation required:

Corporate income tax:

Form 500CR must be completed and submitted with the income tax return (Form 500).

Personal income tax:

Form 500CR must be completed and submitted with the income tax return (Form 502 or 505). If the business is a pass-through entity, Form 500CR must be prepared for the pass-through entity and submitted with the entity's income tax return (Form 510). A modified federal Schedule K-1 provided by the pass-through entity to its members must separately state their shares of the credit. Individuals and entities must attach this statement to the Form 500CR submitted with their personal (Form 502 or 505), corporate (Form 500) or pass-through entity (Form 510) income tax returns.

Public service company franchise tax:

Computation and schedule must be submitted with the franchise tax return (SDAT Form 11).

For more information, contact:

Revenue Administration Division
Comptroller of Maryland
Annapolis, MD 21411-0001
Phone: 410-260-7980 from Central Maryland,
1-800-MD-TAXES from elsewhere
E-mail: taxhelp@comp.state.md.us

or:

State Department of Assessments and Taxation
301 W. Preston Street
Baltimore, MD 21201-2395
Phone: 410-767-1191
E-mail: taxcredits@dat.state.md.us