The $0 Excise Tax Explained

In November 2011, the Frederick County Board of County Commissioners made it a bit easier to build in Frederick County. But what does this mean exactly?

According to Sharon Goetz, Manager of Permitting Services for Frederick County Department of Permits and Inspections, homebuilders can now save about $500-$1000 per single family dwelling permit, and commercial developers can now save thousands of dollars related to building permits for commercial new construction due to the reduction of the Excise Tax to a $0 amount.

Background: The Excise Tax, prior to being reduced to a $0 amount, was charged on (1) all new dwelling units based on the square footage of the dwelling and (2) all new nonresidential floor area (new buildings, new additions, accessory structures, but not permits for existing floor area, like tenant fit outs). The rate for Nonresidential Excise Tax was $0.75 per square foot of floor area (per floor), so you can see how that added up quickly. Sometimes the Excise Tax for a new Nonresidential permit was tens of thousands of dollars! There were only a few exemption categories:
A. Farm construction
B. Government construction
C. Residential addition construction
D. Residential accessory structures

To read the complete ordinance change, please contact the Business Development and Retention Division at 301-600-1058.