• Maryland: Tax Credit For Oyster Shell Recycling Increases Five-Fold
  • June 8, 2015 | Authors: David H. Godenswager; David M. Kall; Susan Millradt McGlone
  • Law Firm: McDonald Hopkins LLC - Cleveland Office
  • Lawmakers in Maryland recently passed Senate Bill 694, which increases the tax credit that an individual or corporation may claim from $1 to $5 for each bushel of oyster shells—about 45-60 pounds, or 100-150 oysters—recycled during the taxable year, up to the lesser of $750 or the state income tax calculated. The increase is effective July 1, 2015, and applies to all taxable years beginning after Dec. 31, 2014.

    Why oysters? According to the Oyster Recovery Partnership (Partnership) they are a “keystone species,” providing habitat for important marine life, and serving as the “kidneys of the 18 trillion gallon Chesapeake Bay by filtering silt, sediment, and nitrates from the water.” The Partnership brags that “the simple act of eating makes oysters Chesapeake Bay’s most effective water filtration system,” because they are capable of pumping and straining up to 2 gallons of water per hour. Unfortunately, the bay’s oyster population has been decimated.

    The Chesapeake Bay Foundation (CBF) reveals that recycling oyster shells is important for the restoration of native oysters in Chesapeake Bay. The shells are becoming increasingly scarce, so recycling them by using them as homes for baby oysters, and then to build new oyster bars, helps replenish the population.

    Chesapeake Bay itself is a critical resource, the largest of the 130 estuaries in the United States. It is home to 3,600 species of animals and plants, and two of the five major shipping ports in the North Atlantic region, Baltimore and Hampton Roads. But because the land used by nearly 17 million people drains into this one estuary, “the wildlife that depends on it is quite literally suffocating, causing economic resources to dwindle and recreational activities to be limited.”

    All of this matters because there is an economic impact to letting the bay suffer. The CBF contends that the bay creates jobs and fosters economic growth in the several states that contain portions of the Chesapeake Bay. In particular:
    • Clean water can increase the value of a single-family home 4,000 feet or closer to the shoreline by up to 25 percent;
    • Improvements in water quality along Maryland's western shore to levels that meet state bacteria standards could raise property values by six percent;
    • Approximately 20,000 construction jobs are created by each $1 billion invested on water and wastewater projects;
    • The number of environmental industry jobs in Pennsylvania, Maryland, and Virginia has surged by 43 percent over the last two decades;
    • In Virginia, every $1 of state and federal funding invested in agricultural best management practices would generate $1.56 in economic activity;
    • 500 million pounds of seafood are harvested each year from Chesapeake Bay; 
    • The commercial seafood industry in Maryland and Virginia contributed $3.39 billion in sales, $890 million in income, and almost 34,000 jobs to local economies in 2009;
    • Nearly two million people go fishing in Pennsylvania each year, contributing more than $1.6 billion to the state’s economy;
    • Roughly $2.03 billion and 32,025 jobs are generated each year in Maryland due to its recreational boating industry;
    • Approximately eight million wildlife watchers spent $636 million, $960 million, and $1.4 billion in Maryland, Virginia, and Pennsylvania, respectively, on trip-related expenses and equipment in 2006; and
    • Americans take more than 900 million trips to coastal areas annually and spend approximately $44 billion during these trips.
    With all these benefits, it is easy to justify preservation of the bay and the native oyster population through tax credit incentives.