Capital City Cultural Arts District guidelines

Ok, ok, alright ok

What exactly is the A&E District or what has been officially designated the “Capital City Cultural Arts District” (CCCAD) in Annapolis and what does it mean for Clay Street?

First, lets define eligibility, or what is referred to as a “Qualified Residing Artist”.
1. owns or rents real property in Anne Arundel County
2. derives income from the sale, publication, production or performance within the CCCAD of an artistic work that the individual wrote, composed, or exectued, either soley or with others within the CCCAD.

note: Artistic work is an original and creative work, whether written, composed, or executed, that falls into one of the following categories:
1. a book or other writing
2. a play or performance of a play
3. a musical composition or the performance of a musical composition
4. a painting or other picture
5. a sculpture
6. traditional or fine crafts
7. the creation of a dance or the performance of a dance
8. the creation of a film or the acting within a film
9. any product generated as a result of any of the categories listed above

note: any piece or performance created or executed for “industry” does not qualify

Arts and Entertainment Enterprise is a for-profit or nonprofit enterprise which is dedicated to visual or performing arts.

Arts and Entertainment Project is a project that promotes or enhances the development of an A&E district.

Okay, so what are the benefits right?

INCOME TAX SUBTRACTION MODIFICATION
to qualify for this benefit the “artist” must meet 3 minimum criteria:
-be “Qualifying residing artist”
-create work defined in the above code
-generate income from work within the CCCAD

the tax deduction 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 applies only at the state level. Federal income tax is still to be paid.

PROPERTY TAX CREDIT
During a 10 year period, a real property tax credit against qualifying property in the CCCAD 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, commerical, or industrial buildings that are constructed or renovated for use by a “Qualifying Residing Artist or Arts and Entertainment Enterprise”.

The credit is as follows:
1. 100% for each of the first 3 years
2. 75% for the 4th and 5th year
3. 50% for the 6th and 7th year
4. 25% for the 8th and 9th year
5. 10% in the 10th year

MISSION AND ENTERTAINMENT TAX EXEMPTION
This tax exemption is:
-applied to gross receipts from an admissions or amusement charge, and
-applied to commercial arts and entertainment enterprises and qualifying residing artists located within the district.

So this opens a lot of questions…I’ve got answers

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Posted in September 2007