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    Maryland Business Personal Property Tax: A Guide

    Posted by Lisa English on May 20, 2021 10:09:05 AM

    Maryland Business Personal Property Tax: A Guide

    When it comes to Maryland business personal property tax, consistency is key. Unlike other states, which have multiple local jurisdictions handling personal property administration matters, the assessment of all personal property in the Old Line State lies within the purview of a single state agency: the Department of Assessments & Taxation (SDAT). The reasoning behind this strategy? To “foster the uniform and consistent administration” of business personal property tax, which includes everything from furniture and office equipment to machinery, tools, and any other property not classified as real property.

    For Maryland businesses, that means fewer mailings compared to other states. Instead of filing separate returns for every location you have (as you would in other states), you simply file one return per legal entity doing business in the state of Maryland that represents all your state locations. The SDAT assesses the value of the personal property and sends it to the county (or counties) where your business is located. But even though the mailings are less, most everything else about the preparation stage stays the same—including having to keep track of all your assets in every location, and depreciating them properly.

    And while this is the most unique characteristic of Maryland business personal property tax, keep reading to learn about other things you need to know before filing your Maryland business personal property return.

    For tax return filing:

    • There’s a filing fee. Maryland businesses must pay a fee to file their returns, which is a rarity in business personal property tax. (And they must file a return in order to do business.) The annual filing fee is $300. It’s the only state that charges a filing fee.
    • You can request an extension. Businesses may request a 60-day extension by completing an application online by April 15.
    • You can file online. Returns can be filed online through Maryland Business Express, SDAT’s newly created digital platform that helps business owners start, grow, and manage their companies.

    For notices & appeals:

    • Notices come from the state. All notices for personal property and real estate come from SDAT, and are mailed at various times beginning in June of the current year.
    • You have 45 days from the notice date to file an appeal. For personal property, you file the appeal back to the state; real estate appeals are filed to the local county.

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    For property tax bills:

    • Personal property bill due dates vary. Returns are completed one company at a time, so mailing dates for notices are staggered. That means bill due dates may vary. However, a general rule of thumb is that personal property tax bills are due by September 30 and must be paid in full. Real estate bills have the same due date, but some jurisdictions allow two-installment payments—the first by September 30 and the second by December 31. (Other jurisdictions expect payment in full by 9/30.)

    This chart highlights key dates related to the state of Maryland personal property returns:

    Key Dates

    Explanations

    1/1 Lien date

    Businesses must report all assets on the books as of this date, in the current year.

    4/15 Return deadline

    Late returns are subject to penalty; non-filing could result in loss of business license. Extensions may be requested before 4/15.

    6/15 Return extended deadline

    Returns that have been granted an extension are due by this date.

    6/1 Start date for issuing of tax bills

    Notices are mailed at various times beginning in June.

    Dec. through Feb., Real estate notices are mailed

     

    Notice date +45 days is appeal due date

     

    9/30 Bill due date

    Personal property & real estate bill due dates vary, but in general are due by 9/30. For real estate bills, some jurisdictions offer to pay in 2 installments, with half due 9/30 and 12/31.


    6 FAQs About Maryland Business Personal Property Tax

    1. What is business personal property?

    Often called personal property, business personal property refers to business-owned assets (not real property) that are subject to taxation in 38 states, of which Maryland is one. In some states, multiple jurisdictions are involved in the administering of personal property tax. However, as noted above, Maryland has a single state agency, SDAT, that handles this process.

    2. How has COVID changed the process of filing state of Maryland business personal property returns?

    Due to the global pandemic and resulting guidelines limiting in-person interactions, SDAT has closed its Charter & Personal Property public counter until further notice. In addition, the department “strongly encourages online filing when possible,” indicating that documents filed online are processed much faster than those filed by mail.

    Notably, SDAT automatically extended the return deadline in 2020 to July 15 in response to COVID. However, this extension was temporary—on October 1, 2020, any previously waived fees and certain deadline extensions were reinstituted. For 2021, the standard April 15 deadline applies, though you may be able to request a two-month filing extension through SDAT’s online extension system as long as you submit the request by the standard deadline.

    3. Why did I receive an estimated personal property tax bill that is significantly more than what I paid last year, and what options are available to correct it?

    If you don’t file a personal property tax return, SDAT estimates the value of your personal property for you. This estimate may exceed your recorded personal property value by as much as 100% (or twice the recorded value). To resolve the issue, you must contact the State Department of Assessments to either file a return correcting the estimate or report a property transfer or business closure.

    4. What is Maryland’s tax rate? How is my resulting bill calculated? What is the interest on late tax payments?

    Maryland does not have a set tax rate; instead, the tax rate is set each fiscal year by the annual budget process. Tax bills are calculated by multiplying the current fiscal year’s tax rate by the certified assessment. Delinquencies incur a 1% interest penalty of the unpaid principal, per month or portion of a month until paid.

    5. How do I change my tax bill address?

    If you want to change the address to which your tax bill is sent, you must notify both the Anne Arundel County Office of Finance and the State Department of Assessments in writing. Upon receipt, the Office of Finance can then forward any current or previous bills to the new address. The State Department updates the account address to ensure all future billings and notices are mailed accurately.

    6. What do I do if I keep receiving bills despite going out of business or never opening one?

    If you are no longer in business—whether due to stopping operations or selling the business—you must report this to the State Department of Assessments and Taxation. Until the department is made aware of your business standing, you are liable to pay personal property taxes even if you no longer own the business and/or its assets.

    Looking for a better way to manage your company’s Maryland business personal property tax?

    Visit our website to learn more about TotalPropertyTax (TPT) software. It helps you handle and process information throughout the entire tax cycle, reducing the time you spend gathering and tracking mailing addresses, depreciation tables, and deadlines. It also helps track return due dates. For example, if you’re filing an extension request for your Maryland business personal property taxes, the software will automatically update the due date when your extension is approved.

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    Download Now: Property Tax Comparison By State

    Topics: Maryland business personal property tax