What Is a Personal Property Return in Maryland? Business Filing & Deadlines

Maryland business owners—from LLCs and corporations to sole proprietors and partnerships—face a critical yearly obligation: filing a Personal Property Return with the Maryland State Department of Assessments and Taxation (SDAT). If your business owns, leases, or uses tangible assets like equipment, inventory, or furniture, understanding this filing requirement is essential for maintaining compliance and good standing in the state.

This guide breaks down exactly what a Maryland Personal Property Return is, who must file it, what qualifies as personal property, when and how to file, penalties for non-compliance, and why staying compliant protects your business’s legal status.

What Is a Maryland Personal Property Return?

The Maryland Personal Property Return, also called the Business Personal Property Return, is an annual report filed with SDAT that lists all tangible business assets owned, leased, or used as of January 1 of each calendar year. These assets are subject to local property tax assessments, and the return allows Maryland tax authorities to accurately assess your business’s personal property tax liability.

This return must be filed in conjunction with your business’s Annual Report—usually Form 1 for corporations and LLCs or Form 2 for sole proprietorships and general partnerships. Filing is mandatory regardless of whether you have significant assets or minimal ones.

The purpose of this filing is to provide transparency and ensure that all businesses contribute fairly to local tax revenues based on their tangible property holdings. It is separate from your income or sales tax filings, focusing solely on the physical assets your business uses in Maryland.

Who Must File?

Any business entity operating in Maryland that owns, leases, or uses tangible personal property must file a Personal Property Return. This includes:

• Domestic and foreign LLCs and corporations registered in Maryland
• General and limited partnerships
• Sole proprietorships doing business in Maryland

The rules are broad: even if your business leases equipment rather than owning it, or if you use personal property in Maryland temporarily, you may be required to report these assets.

Selecting the Right Form:

• Form 1: Generally used by most corporations, LLCs, and other formal business entities
• Form 2: Used primarily by sole proprietors and general partnerships.

If you are uncertain which form to file, SDAT’s website provides guidance, or you can consult with your accountant or tax preparer.

What Counts as Personal Property?

Maryland defines personal property for tax purposes as tangible assets used in your business operations that are not real estate. This can include:

• Furniture and fixtures in your office or storefront
• Machinery and equipment used in manufacturing or service delivery
• Computer equipment and office technology
• Inventory held for sale
• Leasehold improvements
• Vehicles used solely for business purposes (in some cases)

Important Details

• Fully depreciated assets that remain in use or idle still must be reported. For example, an old copier that’s fully depreciated on your books but still sitting in the office counts.
• Assets located outside Maryland but owned by your business may or may not be taxable in Maryland depending on use and location rules, so confirm your specific situation.
• Intangible assets such as goodwill, patents, or trademarks are not reported on the Personal Property Return.

Accurately reporting all tangible assets ensures you avoid under-reporting penalties and receive a fair tax assessment.

When Is the Personal Property Return Due? Can You Request an Extension?

The deadline to file the Maryland Personal Property Return is April 15 each year. If April 15 falls on a weekend or state holiday, the due date moves to the next business day.

If you need more time, Maryland allows you to request a 60-day extension through the Maryland Business Express portal. It’s important to request this extension before the original deadline to avoid late penalties.

In some years, SDAT or local governments may announce special deadline extensions. For example, in 2024, the filing deadline was extended to June 17 due to administrative reasons. Always check SDAT’s website for current filing deadlines and announcements.

How to File Your Maryland Personal Property Return

Maryland offers two primary ways to submit your Personal Property Return:

Online Filing

The easiest and fastest method is via the Maryland Business Express portal (egov.maryland.gov). This secure online system allows you to:

• Complete and submit your Personal Property Return forms
• Request extensions
• Pay any applicable filing fees

Online filing also provides immediate confirmation of submission and reduces processing time.

Paper Filing

Alternatively, you can download the relevant forms (Form 1, Form 2, etc.) from SDAT’s website, complete them manually, and mail them along with any required payment to the address listed on the forms.

Filing Fees

• Corporations generally pay up to $300 per year for this filing.
• Some nonprofits and tax-exempt organizations may qualify for fee waivers.
• Filing fees and penalties must be paid promptly to avoid additional charges.

Make sure to include payment with mailed filings or pay online if filing electronically.

Penalties and Consequences of Not Filing

Failing to file the Personal Property Return on time has serious consequences, including:

• Late Penalties: Penalties can be as high as twice the assessed value of your personal property if you do not file at all. For late filings, scaled late fees apply, increasing over time.
• Estimated Assessments: If you fail to file, SDAT may estimate your business’s property value and tax liability, which could be significantly higher than actual.
• Loss of Good Standing: Non-filing results in loss of your business’s “good standing” status with the state. This status is critical for maintaining legal protections such as liability shielding and your ability to conduct business legally.
• Forfeiture of Corporate Status: Prolonged non-compliance can lead to administrative dissolution or revocation of your corporate or LLC status, severely impacting your ability to operate, sign contracts, or open bank accounts.

It is much safer and more cost-effective to file on time—even if you believe you have minimal or no assets to report.

Why Maintaining Good Standing Matters

Good standing means your business is compliant with Maryland’s filing and tax requirements. Maintaining it is crucial because:

• It protects your limited liability status, shielding owners and managers from personal liability.
• It enables you to apply for business licenses, loans, and contracts.
• It prevents disruption in your business operations and reputation.
• It allows your business to legally enter into agreements and enforce contracts.

If you lose good standing due to failure to file the Personal Property Return or pay fees, restoring your status may require paying back fees, penalties, and completing filings for multiple years—a costly and time-consuming process.

Conclusion & Next Steps

Maryland business owners should treat the Personal Property Return as a non-negotiable annual responsibility. Here’s a quick checklist for staying compliant:

• Identify all tangible assets owned, leased, or used as of January 1 each year.
• File the correct Personal Property Return form (Form 1, 2, etc.) by the April 15 deadline.
• Use the Maryland Business Express portal for easy online filing and extension requests.
• Pay any applicable filing fees promptly.
• If you have questions about asset valuation or complex filings, consult a qualified tax advisor or accountant familiar with Maryland business tax laws.
• Monitor SDAT’s website for any updates on deadlines or filing procedures.

For further assistance, contact Watter CPA today for expert help with your Maryland Personal Property Return filing.

FAQs

What is considered personal property for tax purposes in Maryland?

Who is required to file a Personal Property Return in Maryland?

When is the deadline to file a Maryland Personal Property Return?

How do I file a Personal Property Return in Maryland?

What happens if I don’t file the return or report zero assets?

‍