Annapolis Arts and Entertainment District
WHO AND WHAT IS ELIGIBILE?
A Qualifying Residing Artist is an individual who:
1. owns or rents residential real property in Anne Arundel County; and
2. derives income from the sale, publication, production or performance within the Annapolis Arts District of an artistic work that the individual wrote, composed, or executed, either solely or with others within the Annapolis Arts District.
Artistic Work is an original and creative work, whether written, composed, or executed, that falls into one of the following categories:
1. book or other writing
2. play or performance of a play
3. musical composition or the performance of a musical composition
4. painting or other picture
6. traditional or fine crafts
7. creation of a film or the acting within a film
8. creation of a dance or the performance of a dance
9. any product generated as a result of any of the categories listed above
Note: Any piece or performance created or executed for industry oriented or industry related production does not qualify.
Arts and Entertainment Enterprise is a for-profit or nonprofit entity which is dedicated to the visual or performing arts.
Arts and Entertainment Project is a project that promotes or enhances the development of an A&E district.
WHAT ARE THE BENEFITS?
Artist Income Tax Benefit
To qualify for this artist income tax benefit, you must meet the three minimum criteria:
• be a qualifying residing artist
• create artistic work as defined in the code, and
• generate income from that work within the Annapolis Arts District
If you can meet all three of the above criteria, then you may be eligible for a tax deduction on your state income tax.
The tax deduction – or income tax subtraction modification – is not a tax credit. Instead, artists who create and sell work within the district are not taxed on the income derived from art and art enterprises. This tax benefit only applies at the state level. Artists continue to pay the full amount of federal income tax.
Artists who would like to take advantage of the program must submit Maryland State Tax Form 502AE when you file your state income tax returns. The instructions for this form include the state’s definition of art-derived income. Questions regarding how the artist income tax benefit works should be addressed to the Comptroller of Maryland at email@example.com
Admission & Amusement Tax Exemption
The City of Annapolis has adopted a ten-year exemption from the Admissions and Amusement Tax for those certified arts and entertainment activities occurring within the Annapolis Arts District.
Property Tax Credit
During a 10 year period, a real property tax credit against qualifying property in the Annapolis Arts District will be provided by the City of Annapolis and Anne Arundel County. The intent is to reduce the tax levied on the assessment increase due to construction or renovation of eligible buildings. This credit is available for space in manufacturing, commercial or industrial buildings that are constructed or renovated for use by a Qualifying Residing Artist or an Arts and Entertainment enterprise.
The credit applies to the resulting increase in property value as follows:
1. 100% in each of the first 3 years
2. 75% in the 4th and 5th years
3. 50% in the 6th and 7th years
4. 25% in the 8th and 9th year
5. 10% in the 10th year
Map of the Arts District
To see if your business location is located in the Annapolis Arts District, please review this map.
The Annapolis Economic Development Corporation will be happy to assist you with the incentives associated with the Arts District. For more information on the Annapolis Arts District and its activities, please contact the Anne Arundel County Arts Council.