A qualified 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 or personal income tax, public service 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.
The co-generator or electricity supplier may only apply the credit against the State income tax for the tax year in which the credit was earned. The amount of the credit may not exceed the State income tax for that tax year.
An electronic tax return supporting Form 500CR must be filed to claim this credit against the Maryland income tax, for tax years beginning after December 31, 2012.
See Form 500CR Instructions for specific line-by-line instructions.
An electronic tax return supporting Form 500CR must be filed to claim this credit against the Maryland income tax, for tax years beginning after December 31, 2012. The appropriate electronic Maryland Income Tax Return - Form 500 for Corporations, Form 510 and 510 Schedule K-1 for Pass-Through Entities, and Form 502 or 505 for Individuals must be filed to claim this credit. A copy of the certification by the State Department of Assessments and Taxation (SDAT) must be included with the electronic return
Public service company franchise tax:
Computation and schedule must be submitted with the franchise tax return (SDAT Form 11 or 11T).
State Department of Assessments and Taxation
301 West Preston Street
Baltimore, MD 21201-2395