MARCH 2005
Getting Goods to Market
Plenty of Extras, No Extra Taxes
Federal Activity Shoulders Economy
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Federal Activity Shoulders Economy
A February 2004 study of Maryland's state and local business taxes commissioned by the Maryland Chamber of Commerce found that the single largest tax on business in Maryland is the property tax on business property, which accounted for 36 percent of Maryland's total business taxes of $7.8 billion in FY 2003.
But the state's total tax burden on corporations is largely kept at bay. That goes back to 2001, when the state changed its apportionment structure for multi-state companies to a single sales factor. State and local individual income taxes take up the rest of the tax slack. They're able to do that, in part, because "income generated by non-taxable federal government activities in Maryland far surpasses any other state," said the study.
An illustration was at hand in January 2005, when Abingdon-based Science Applications International Corp. (SAIC) immediately expanded its leased space at the Lakeside Business Park by 77 percent to 160,000 sq. ft. (14,864 sq. m.) and hired 150 more people when it received a big DoD contract.
The trend is also indicative of a growing services-based economy, which has an immediate effect on industrial property. That trend too receives constant illustration: The former Bata Shoe factory in Belcamp was demolished in October 2004 to make way for a $200-million expansion of the Water's Edge mixed-use development. The new project will feature 400,000 sq. ft. (37,160 sq. m.) of office park in addition to its high-end housing and retail components. But the project is already tied in to the state's overall strengths: One of its lead tenants is the Logistics Management Institute.