Artists, arts organizations and other creative enterprises operating in the Elkton Arts & Entertainment District have the opportunity to take advantage of tax incentives afforded by the District’s official state designation as an Arts & Entertainment District. The Arts & Entertainment District Program is administered by the Maryland Secretary of Business and Economic Development. Activities related to revenue and taxes are administered by the Maryland Department of Assessments and Taxation and the Comptroller.
Income Tax Subtraction Modification
Qualifying artists who own or rent residential real property in Elkton and who conduct business in the Elkton Arts & Entertainment District, may be eligible for a Maryland personal income tax subtraction modification to eliminate state and local income tax on their income from the sale, publication, or production within the District of their artistic work that is written, composed, or executed within the District. This includes income derived from internet, mail order, and catalog sales of artistic work that is shipped from within the District to buyers in another location, if the qualifying artist created that artistic work within the District.
Admission & Amusement Tax Exemption
Enterprises dedicated to visual or performing arts located within the Arts & Entertainment District are exempt from the collection of the State of Maryland’s Admissions and Amusement Tax. Businesses must qualify for the exemption and notification must be provided to the State of Maryland’s Comptroller’s Office in order to be eligible.
Arts and Entertainment Districts Property Tax Credit
Artists or arts and entertainment enterprises may receive a 10-year property tax credit for renovated buildings that provide live-work space for artists and/or space for arts and entertainment enterprises. The property tax credit is prorated to reflect the proportion of a rehabbed building and only applies to improvements made to the property. Property owners renovating live-work spaces in an A&E district can contact the MD State Department of Assessments and Taxation to determine the building’s eligibility. Within 90 days following receipt of a tax assessment, property owners must file a tax credit application with the City’s Department of Finance. Property owners must annually re-certify that the building is being used in compliance with the property tax credit. Information & Application can be found here.
The Elkton Arts District 5 Year Plan
The main goal of Elkton’s A&E 5 year plan is to build a solid working relationship with our artists. Through the Artist Registry Campaign we will endeavor to provide artists information on tax incentives, job opportunities, and ways to be involved in district events. We aim to further identify ourself as a thriving A&E District and believe showcasing our public art and continuing to market ourselves will allow us to meet this objective.
- Artwork produced and sold by qualifying residing artists in any Maryland A&E District is exempt from Maryland and local income tax. This includes work sold online and shipped from within the district. Share the Info.
- Admission & Amusement tax for live performances and other arts-related events that charge an admission fee may be waived in A&E Districts.
- Real property tax credits are available on the improvements made to properties for arts-related purposes. This includes new construction. See the section “For Property Owners” at the below tab for more details.
A “qualifying residing artist” is defined as an individual who:
- Owns or rents residential property in the County where the A&E District is located; and
- Conducts an arts or entertainment-related enterprise within the A&E District; and
- Derives income from the sale or performance of an artistic work within the A&E District (excluding adult entertainment) that the individual wrote, composed, or executed, either solely or with one or more other individuals.
An “arts or entertainment-related enterprise” is a for-profit or nonprofit entity dedicated to the visual or performing arts.
An “artistic work” means original and creative work, whether written or composed, or executed, that falls into one of the following categories:
- Book or other writing
- Play or the performance of a play
- Musical composition or performance of a musical composition
- Painting or other picture
- Traditional or fine crafts
- Creation of a film or acting in a film
- Creation of a dance or performance of a dance
“Artistic work” includes any product generated as a result of any of the categories listed above. An artistic work does not include any piece or performance created or executed for industry-oriented or industry-related production, such as a commercial or advertising copy.
Every business needs customers, and we have resources available to help market your business:
- Any arts-related event you host may be added to our events calendar. Please enter the details about your event and we will be happy to list it. We will also include your event in our e-newsletter and on social media.
- The Cecil County Arts Council also maintains an events calendar. You may submit your event details via their website form here.
- Downtown Elkton Main Street offers the following marketing assistance to downtown businesses, including artists: “Coming Soon” window poster announcements, grand opening recognition, a printed annual calendar of events rack card, and strolling guide of the Elkton Arts District (includes A&E Business Directory), and co-op advertising opportunities.
Whether you are launching a new business or growing one you’ve already established the Elkton Alliance and Cecil County Public Library Business Information Center offer a variety of resources. Services include help in the following areas:
- Developing a business plan and applying for financing
- Developing a marketing plan for your business
- Compliance with local and state regulations
- Assistance completing applications for A&E District incentives
- Property search and site selection
- Providing links to training, marketing, and other business resources
- Coordinating market studies and strategic planning initiatives
Our vision is to create a thriving and vibrant downtown, and non-arts related businesses play a key role in that vision. By locating in the Elkton Arts & Entertainment District, you will enjoy the benefits of the foot traffic that the arts attract. Your business is eligible to use most of the Marketing and Business Assistance listed under the “For Artists” tab. To get started, please contact Margie Blystone at MBlystone@ElktonArts.com or at (410) 398-5076.
REAL PROPERTY TAX CREDITS
Properties within the Elkton Arts & Entertainment District are eligible for real property tax credits for improvements that are made to the property for arts-related enterprises. If you renovate a property or build new, you will receive a tax break applied to the town portion of your real property taxes for the increased assessed value of the property. This tax break applies to the portion of the project that includes an arts-related enterprise.
For example, let’s say you buy a two-story building and fully renovate it. The first floor will be used as studio and gallery space and the second floor will include apartments. In this case, 50% of the project is for an arts-related enterprise, so 50% of the increased assessed value of the property is eligible for the tax credit.
The state’s assessment office only reassesses property if at least $100,000 is spent on renovations and/or construction. Therefore, all projects must include at least this level of investment to be eligible for real property tax breaks. This is the amount that must be spent on the entire project, not just the arts-related portion.
The real property tax credit is applied for ten years according to the following schedule:
*The amount by which the increased assessment of a property is reduced for the arts-related portion of the project. The reduction applies to real property taxes levied by the Town of Elkton only.
If you would like more information or a copy of the application to qualify for real property tax credits, please contact Margie Blystone ant MBlystone@ElktonArts.com or call (410) 398-5076. Please note: An application for real property tax credits must be completed before your project begins.
Elkton Arts & Entertainment is actively working to recruit new artists to live and work within the Arts District. If you own a property that is available for sale or lease, we would be happy to include it in our online property listing free of charge. Residential and commercial properties may be listed.