sales agreement (if available). Upon proper notification and
compliance with Section 10- 402 of the Tax Property
Article, the assessment shall be transferred to the new
owner(s). See Form 21 as you may be required to
complete and submit it to the Department.
OUT OF BUSINESS
If a business discontinues operations or goes out of
business prior to January 1, and has not filed Articles of
Dissolution (Domestic Corporations), an Application for
Termination (Foreign Corporations), a Certificate of
Cancellation (LLC) or a Withdrawal Notice (LLP, LP) with
the Department’s Charter Division, a return or letter of
explanation detailing the date the business ceased
operations and what happened to the property must be
filed. Failure to provide this information may result in
an estimated assessment being made against the
business and the business not having good standing
status.
Businesses that have not filed Articles of Dissolution, an
Application for Termination, a Certificate of Cancellation or
a Withdrawal Notice are legally active until they do so, or
until their charters are forfeited (Domestic Corporations), or
their authority to do business is forfeited (Foreign
Corporations, LLCs, LLPs, LPs, statutory trusts (formerly
business trusts), and REITs). See website Charter
Business Services for frequently asked questions.
AUDIT OF RETURN
All personal property assessments, and any information,
and figures reported on the personal property return,
accompanying schedules and related documents are
subject to audit. As a result of such audits, the Department
may issue corrected assessments.
AMENDED TAX RETURNS
Amended Business Personal Property Tax Returns can be
filed to correct reporting errors or claim a missed exemption
(except for missed manufacturing exemptions) within 3
years of the April 15th date that the return was originally
due. Amended returns must be accompanied by
information explaining why the personal property tax return
is being amended and reconciling the differences with the
original tax return. Please write AMENDED across the top
of page 1 and in the REMARKS section, along with a brief
explanation for the amended personal property tax return.
You may also wish to provide additional detail for an
amended return by making use of the Form SD1. Again,
please verify that your entity name and Department ID
number figure prominently. Do not send $300 filing fee
with an amended tax return. Amended tax returns should
be mailed to:
Maryland Dept. of Assessments and Taxation
Personal Property Division
301 W. Preston Street
Baltimore, Maryland 21201-2395
EXEMPTIONS
Personal Property Tax Exemptions provided by statute
shall be strictly construed. Before an exemption can be
obtained, the taxpayer must show affirmatively that the
exemption is clearly allowed.
Businesses may file amended returns to correct reporting
errors or claim missed exemptions (except for missed
manufacturing exemptions) within three years of the April
15th date that the return was originally due. The following
are examples of two of the more common personal
property tax exemptions.
Manufacturing and Research and Development, Tax
Property Article § 7-225
For manufacturing exemption requests, an application must
be submitted on or before September 1 of the assessment
year in order to qualify for the current tax year. Please see
https://dat.maryland.gov for the Manufacturing and R&D
Exemption Application. Section 7-104 of the Tax-Property
Article of the Annotated Code of Maryland has been
revised to include subsection (d) that allows the owner of
manufacturing personal property to file an application within
6 months after the date of the first assessment notice for a
taxable year that includes the manufacturing personal
property. If the application is approved, the exemption shall
be granted for the taxable year. This exception to the
September 1 deadline is applicable to taxable years
beginning after June 30, 2009. No manufacturing
exemption can be granted unless a timely application is
filed.
Once the exemption is granted to an entity, no additional
manufacturing applications are required in subsequent
years. Manufacturing assets acquired after the exemption
is granted will need to be described as well as the role the
assets play in the manufacturing process. If this
information is not provided, the assets will likely be subject
to assessment.
It will be necessary to provide the letter from the
Department granting your entity the Manufacturing/R&D
Exemption, to any companies that lease manufacturing
equipment to your entity so that the leased equipment can
qualify for the exemption. The law specifically includes the
following activities as part of the manufacturing process: (1)
the identification, design or genetic engineering of
biological materials for research or manufacture; and (2)
the design, development or creation of computer software
for sale, lease orlicense.
Other personal property assessment exemptions:
All personal property owned by certain organizations,
including religious groups, government, non-profit
hospitals, cemetery and mausoleum companies, and
certain other organizations, or groups which meet certain
“strict use” criteria is exempt. These are referred to as
exempt organizations and are fully exempt throughout
Maryland from any assessment and taxation. In section V,
F or in Remarks, please give a brief explanation or reason
for the exemption.
Charitable or Educational Purposes, Tax-Property
Article § 7-202
Non-stock educational or charitable exemptions are also
obtained by filing an application. An organization must
submit written information detailing its operation in the form
of the Department’s Charitable Application.
If the organization is required to file an IRS Form 990, it
should be included with the application. Also, submit a
copy of the 501(c)(3) certification from the IRS. Please
note that because the laws differ, organizations granted
exempt status by the Internal Revenue Service are not
necessarily exempt from personal property taxation in
Maryland. The exemption applies to the assessment.
Entities that are granted an exemption under Tax Property
Article 7-202, are still required to file the Form 1.
Exemption applications may be
emailed to sdat.ppaudit@maryland.gov
In addition, State law requires that certain types of personal
property be fully exempt throughout Maryland from any