Maryland Decade Act-- What You Need to Know!

Governor Moore recently signed the Delivering Economic Competitiveness and Advancing Development Efforts (DECADE) Act into law, primarily by extending deadlines for tax credit programs. The changes impact the following:

• Research and Development (R&D) Tax credit
• Job Creation Tax Credit
• Employer Security Clearance Costs Tax Credit
• Film Production Tax Credit
• Regional Institution Strategic Enterprise (RISE) Zone

Because the Act was signed in May, timing matters; most of these changes took effect July 1, 2026, and are already in force.

Key Takeaways

• The Maryland DECADE Act extends tax credit program deadlines, impacting many tax credits and incentives.
  • The R&D Tax Credit is extended through tax year 2030.
  • The Job Creation Tax Credit is extended through January 1, 2032.
  • The Employer Security Clearance Costs Tax Credit is extended through the 2032 tax year.
• RISE Zones saw the most changes with administration moving to the Maryland Economic Development Corporation (MEDCO).
• DECADE also created a new sales tax exemption; intercompany sales of certain data and IT services between affiliated group members are exempt from Maryland’s 3% sales and use tax as of July 1, 2026. This represents significant savings for any corporate group that centralizes technology functions.
• Entities should evaluate eligibility now rather than waiting until year-end, as most changes are already effective as of July 1, 2026.

What is Impacted?

The R&D Tax Credit

The R&D Tax Credit, equal to 10% of qualified Maryland R&D expenses, is extended through tax year 2030. The credit remains capped at $250,000 per taxpayer and $12 million in annual statewide approvals, with $3.5 million set aside for small businesses. If your organization conducts R&D in Maryland and the credit was set to terminate, that cliff is now removed for several more years.

The Job Creation Tax Credit

The Job Creation Tax Credit, worth $3,000 to $5,000 per qualified new full-time position, depending on the revitalization area's status, is extended for five years through January 1, 2032. This credit applies if your organization is locating or expanding a facility in Maryland and adding qualifying positions within a 24-month window.

The Employer Security Clearance Costs Tax Credit

For organizations with security clearance costs, the Employer Security Clearance Costs Tax Credit has been extended through tax year 2032. The credit covers up to $200,000 in security clearance-related administrative expenses; up to $200,000 in first-year leasing costs for small businesses, and up to $200,000 of construction and equipment costs to construct or renovate a single Sensitive Compartmented Information Facility (SCIF) (up to $500,000 for multiple SCIFs), is extended five years, through the end of tax year 2032.

The Film Production Activity Credit

For the Film Production Activity Credit, the State raises the per-production cap from $10 million to $30 million for fiscal years 2027 through 2030, allowing larger productions to earn more credit during the window.

Regional Institution Strategic Enterprise (RISE) Zones

RISE Zones saw the most changes with the administration moving to the Maryland Economic Development Corporation (MEDCO). This includes zone designations and business certifications. In addition, the zone renewal terms were extended from five to ten years, the rental assistance period was extended from three to five years, and the rental assistance matching requirement was eliminated. Additionally, startup eligibility restrictions for rental assistance were removed, and MEDCO can approve one additional zone per county if the area promotes quantum computing. Lastly, the Enhanced Biotechnology Investment Incentives Tax Credit increased for RISE-zone companies from 50%/$500,000 to 75%/$750,000 and the State Department of Assessments and Taxation annual report filing fee was waived.

New Sales Tax Exemption

DECADE also created a new sales tax exemption that may provide substantial sales tax savings. Since 2025, Maryland has applied a 3% sales and use tax to certain data and information technology services, such as software publishing, data processing, and computer systems design. DECADE exempts these services and related digital products from that tax when they are sold between members of the same affiliated group, meaning charges between commonly owned companies. Organizations that deliver IT or data services through a shared-services or captive entity and bill those services to related companies should no longer charge the 3% tax as of July 1, 2026. This sales tax exemption represents significant savings for any corporate group that centralizes technology functions, as intercompany transactions have traditionally been subject to sales tax.

When Do These Changes Take Effect?

The Act was signed on May 12, 2026, but the pieces phase in on different dates. Two are most significant for planning. First, the program changes, including the new sales tax exemption, took effect July 1, 2026, and are in force now. Second, the income tax credit extensions, which cover R&D, Job Creation, and Employer Security Clearance Costs, apply to tax year 2026 and forward, while the RISE Zone property tax credit changes apply to tax years beginning after June 30, 2026.

With everything live for the current tax year, there is no reason to wait to evaluate your position.

Taken together, the DECADE Act buys Maryland businesses several more years of certainty on credits that were approaching their sunset — and, for RISE zones and film production, a larger opportunity than before. The practical question for your organization is whether you are already claiming one of these credits, whether an approaching deadline was about to cut you off, or whether one of these changes reopens a door you had written off. If you conduct R&D, are adding jobs, carry security clearance costs, or operate near a Maryland research institution, it is worth a fresh look before your next filing.

Our State and Local Tax team can help you confirm eligibility, quantify the benefit, and make sure you are not leaving credits on the table. Contact us today to discuss how we can support you.