2022 Instructions for Form 1 - Business Personal Property Return

INSTRUCTIONS FOR FORM 1

THE ANNUAL REPORT &

BUSINESS PERSONAL PROPERTY RETURN

An Annual Report must be filed by all business entities formed, qualified or registered

to do business in the State of Maryland, as of January 1

Maryland State Department of Assessments and Taxation, Business Services Division

Business Personal Property Division, 301 West Preston Street Room 801, Baltimore Maryland 21201 1052

WHO MUST FILE THE ANNUAL REPORT

The Annual Report is a required filing for all business

entities, regardless of whether the business owns property,

generates income or has conducted business activity in

Maryland during the preceding year. This includes the

following entity types, both Domestic and Foreign:

Stock, Tax Exempt Non-Stock, Non-Stock,

Religious, Close, Benefit and Professional

Corporations,

Limited Liability Companies & BenefitLLCs,

Limited Liability Partnerships, Limited Partnerships

& Limited Liability LimitedPartnerships,

Statutory (Business Trusts), Real Estate

Investment Trusts

Failure to file the Annual Report may result in forfeiture of

the entity’s right to conduct business in the State of

Maryland.

WHEN TO FILE

The deadline to file is April 15th. Should April 15th fall on a

weekend, the due date is the Monday immediately

following. Annual Reports that are postmarked by close of

business (COB) on the Monday following will be considered

timely.

You may request a 60 day extension of the filing deadline,

at no cost, by visiting the Personal Property Extension site

at http://pprextensions.dat.maryland.gov/ Extension

requests must be made on or before April 15th.

Increased use of this site is anticipated as April 15

approaches, so SDAT suggests you apply for an extension

as soon as the site opens in December. Paper extensions

are no longer accepted by the department.

HOW & WHERE TO FILE

You may file online through the Maryland Business

Express system,

https://egov.maryland.gov/BusinessExpress

Filings may be submitted in person by visiting SDAT

Headquarters in Baltimore. The address is:

State of Maryland - State Center

301 W. Preston Street, Room 801

Baltimore, Maryland 21201

Filings may also be submitted by mail. Be sure to sign the

Annual Report and include a check or money order for the

full amount of any required filing fee. Send the completed

package to:

Maryland Dept. of Assessments and Taxation

Annual Report

PO Box 17052

Baltimore, Maryland 21297-1052

All other correspondence, such as Amended Annual

Reports, or certified/return receipts, should be sent

to:

Maryland Dept. of Assessments and Taxation

Business Services Unit

301 W. Preston Street, Room 808

Baltimore, Maryland 21201-2395

REMINDER: To ensure proper filing, include your SDAT

Department ID on your report, where requested, and on all

communications with SDAT. Annual Reports filed without a

Department ID may not be accepted, causing delays and

possible late fees.

INFORMATION and ASSISTANCE

General information:

Customer Service Contact Center

410 767 1330

Email: sdat.cscc@maryland.gov

PERSONAL PROPERTY UNIT

410-767-1170

Valuation and assessment information

Online Extensions: http://pprextensions.dat.maryland.gov/

E-mail Address: SDAT.PersProp@Maryland.gov

CHARTER UNIT

Charter Information: 410-767-1330

Incorporations, Qualifications, Revivals

& Dissolutions: 410-767-1330

E-mail Address: SDAT.CharterHelp@Maryland.gov

Department Website: https://dat.maryland.gov

Toll Free within Maryland: 1-888-246-5941

Maryland Relay Service (MRS): 1-800-735-2258 TT/VOICE

(MRS for speech and hearing impairment)

Form 1 Instructions

Page 1 of 9

FILING FEES

The filing fee for most business entities is $300. The

fee must accompany the Annual Report in order for

the report to be accepted by SDAT. Failure to

include the filing fee may result in SDAT not

accepting the report which may

Form 1 Instructions

Page 2 of 9

TYPE OF BUSINESS ID# PREFIX FILING FEE

Domestic Stock Corporation D $300

Foreign Stock Corporation F $300

Domestic Non-Stock Corporation D $0

Foreign Non-Stock Corporation F $0

Foreign Insurance Corporation F $300

Foreign Interstate Corporation F $0

Domestic Limited Liability Company W $300

Foreign Limited Liability Company Z $300

Domestic Limited Partnership M $300

Foreign Limited Partnership P $300

Domestic Limited Liability Partnership A $300

Foreign Limited Liability Partnership E $300

Domestic Statutory Trust B $300

Foreign Statutory Trust S $300

Real Estate Investment Trust D $300

SDAT Certified Family Farm A,D,M.W $100

Amended Returns

ALL

The filing fee must be paid regardless of whether the

business owns property in Maryland, generates any income

in Maryland or conducts any business in Maryland.

Checks and money orders should be made payable to

“SDAT” and include the SDAT Department ID to ensure

credit to the proper account.

Corporations not authorized to issue capital stock are not

required to pay a filing fee.

The filing fee for SDAT Certified Family Farms is $100

beginning the year following its election to become a

Family Farm.

LATE FILING PENALTIES

If the business files its Annual Report after the deadline, it

may be subject to late filing penalties. The penalties

cannot be prepaid and can only be calculated after the

Personal Property Tax Return is filed. If the business is

assessed any late filing penalties, it will be notified by mail

after the assessment is complete. The following minimum

and maximum initial (base) penalty amounts apply:

Days Late

Minimum

Maximum

01-15

$30

$500

16-30

$40

$500

31 or more

$50

$500

A business which files the Form 1 after the April 15th due

date (June 15 for those with approved extensions), will

receive an initial penalty of 1/10 of one percent of the

county assessment, or the base penalty, whichever is

greater. Interest will accrue at the rate of 2% of the initial

penalty amount for each thirty (30) day period, or part

thereof, that the Form 1 is late.

WHAT ADDRESS TO USE

For the purpose of the Annual Report and Personal

Property Tax Return, provide the business’ mailing address

in Section I of the Form 1.

The business’ mailing address may also be changed when

submitting the Annual Report. Insert the new mailing

address in the address fields in Section I, and check the

box to indicate that this is “a change of mailing address.”

A business’ mailing address may be any US Post Office

recognized address, including non-Maryland addresses,

addresses in foreign countries and post office boxes.

PERIOD COVERED BY ANNUAL REPORT AND

PERSONAL PROPERTY TAX RETURN

All reports cover the calendar year regardless of the

business’ fiscal year. All information required to be

reported shall be as of January 1 of the filing year, also

known as the date of finality, except for items which

specifically ask for information from prior years.

COMPLETING THE ANNUAL REPORT

To start your Annual Report (Form 1), check the

appropriate box for the business type at the top of the form

and note the associated filing fee for your business type.

SECTION I

All business entities must complete this section. If any item

does not apply, leave that item blank or insert “N/A.”

Provide the full, legal name of the business entity, including

any tails or endings such as Inc. or LLC. (Required)

Provide the complete mailing address for the business. If

this is a new mailing address, check the box to the left.

You cannot change the Principal Office or Resident

Agent address using this method. Please consult website

for instructions.

Provide the SDAT Department ID. If you do not know your

Department ID, you can look it up on Maryland Business

Express:

(https://egov.maryland.gov/BusinessExpress/EntitySearch.)

The ID number is necessary to ensure proper credit to your

account.

Provide the entity’s FEIN (federal tax identification number

obtained from the IRS).

Provide the business entity’s Federal Principal Business

Code (obtained from the IRS).

Provide the nature of business.

Provide the trading-as-name (DBA) that the business uses,

if any.

Provide an email address in order to receive important

reminders from SDAT.

SECTION II

Only complete this section if the business entity is a

corporation (domestic or foreign). If the business entity is

not a corporation, skip this section and proceed to Section

III.

Form 1 Instructions

Page 3 of 9

Provide the names and mailing addresses of all corporate

officers. All domestic corporations must have a President,

Secretary and Treasurer. Attach additional pages if

necessary.

Provide the names of all corporate directors. All Maryland

corporations (except Close corporations) must have at

least one director. Religious corporations should list the

names of all Trustees here. Attach additional pages if

necessary.

Due to the passage of Chapter 513 during the 2019

General Assembly Session a new request for data has

been included on the 2020 Form 1. The Total number of

Directors, Total number of Female Directors only applies to

tax exempt, domestic non-stock corporations with an

operating budget exceeding $5,000,000; or domestic stock

corporations with total sales exceeding $5,000,000. If one

of the former applies to the corporation, this questions

must be completed unless at least 75% of the corporation’s

shareholders are family members. This question is

required by law, Tax-Property Article §11-101.

SECTION III

All business entities must complete this section. If the

answer to all questions is “No”, only the Annual Report

must be filed with SDAT. Please proceed to Section IV,

SIGN, and return this Annual Report, with fee if

applicable, to the Department:

Department of Assessments and Taxation, Charter Unit

P.O. Box 17052, Baltimore, MD 21297-1052

Check “Yes” if the business entity owns, leases or uses any

property other than real estate, intellectual property or

vehicles registered with the MVA, and that property is

located in the State of Maryland. The term “Personal

Property” specifically includes property owned by the

business, leased by the business or used by business,

even if that property is owned by another business or

individual. “Personal property” includes computers, phones,

cell phones, furniture, draperies, inventory, equipment,

tools, machines, books, artwork, supplies and fixtures. Only

check “No” if the company does not use, lease or own any

property that is located in the State of Maryland.

If you answered yes, but the personal property your entity

owns is exempt (religious groups, charitable or educational

organizations), you will not have to complete the Business

Personal Property Tax Return Portion. You may wish to

complete the Form SD1. Note: The Business Personal

Property Tax Return will have to be completed if the

entity leases personal property from others.

Check “Yes” if the business has or is required to

have a Trader’s License (sometimes called a

business license) issued by the Circuit Court for

the county or counties in which the business has

locations.

"If you are unsure of whether this applies to you,

please contact your county's Clerk of the Court

at https://www.courts.state.md.us/pia/clerks.

Maryland Annotated Code, Business Regulation

Article §17-1808 allows counties and

municipalities to adopt a Uniform Trader's

License Fee."

If the business had gross sales in Maryland please provide

the amount of business transacted in MD.

Form SD1 does not apply, the Business Personal

Property Tax Return will have to be completed.

See NOTES at the end of these instructions for

important information regarding the Form SD1.

SECTION IV

This is the signature part of the form and all business

entities must complete this section.

If you are mailing the form, original signatures are required.

Photocopies, confirmed signatures, faxes, scans or any type

of signature other than an original, ink signature are not

acceptable. This form is signed under oath and subject to

the penalties of perjury.

Please review it carefully for accuracy before you sign and

submit it!

This item must be completed by all business entities. If this

item is left blank, the Annual Report will be considered

If you answered yes to any of the questions and the

Form 1 Instructions

Page 4 of 9

incomplete and will not be accepted. Print the name of

the person signing on behalf of the business. The date

should be the date the form is signed. Include a phone

number and email address so that we can contact you to

resolve any potential discrepancies or errors quickly.

Only complete the next signature line if you are

preparing the return for or on behalf of the business

entity, and are not a constituent of the business. This

item generally applies to accountants, tax preparers

and attorneys.

ABOUT THE BUSINESS PERSONAL PROPERTY

TAX RETURN

WHAT MUST BE REPORTED

Generally, all tangible personal property owned, leased,

consigned or used by the business, and located within

the State of Maryland on January 1 must be reported.

Property not in use must still be reported. All fully

depreciated and expensed personal property must also

be reported.

Personal property includes, but is not limited to, office

and plant furniture, machinery, equipment, tools,

furnishings, trade fixtures, inventory, and all other

property not considered part of the real estate.

Personal property in this State (other than operating

property of Railroads and public Utilities) falls into

two subclasses:

I. Stock in business or inventory is goods held by a

taxpayer for sale, and goods placed on consignment to

another for sale, in the expectation of a quick turnover.

Stock in business does not include goods manufactured

by the taxpayer but held by the taxpayer for purposes

other than sale, or goods manufactured by the taxpayer

but placed in possession and control of another as in the

case of leased property.

Stock in business is assessed at cost or market value,

whichever is lower. LIFO method of valuation is

prohibited.

II. All other personal property includes all personal

property, other than inventory, and is reported at full

cash value.

Taxpayers shall report such property which has been

acquired by purchase at cost in the year of acquisition.

Taxpayers shall report such property which has been

acquired other than by purchase (including property

manufactured by the taxpayer) at fair market value. To

assess “all other personal property” the Department

generally applies a 10% rate of depreciation per annum

to the reported property. Exceptions to the 10% rate can

be found on the Depreciation Rate Chart on page six

(6).

Normally, property will not be depreciated below 25% of

the original cost.

Estimated assessments may be issued when

questions remain unanswered or the answers are

incomplete or evasive. Real property is not to be

reported on the return.

REPORTING COST OF PERSONAL PROPERTY

Round amounts to the nearest whole dollar. Fifty cents

and above should be rounded to the next highest dollar.

COMPLETING THE BUSINESS PERSONAL

PROPERTY TAX RETURN

At the top of the Business Personal Property Tax Return,

copy the complete legal name of the business and the

Department ID from the first page in the spaces provided.

This is required to correctly credit your account.

Form 1 Instructions

Page 5 of 9

SECTION V

All business entities complete. It is necessary to provide

the business name and Department ID # so that proper

credit may be made to your account.

Questions A through F

Must be completed by any business entity that responded

“Yes” to either question in Section III.

Provide the correct mailing address. Be sure it is the same

address you provided on the Form 1, Annual Report.

Provide a current email address so that you can receive

important assessment updates from the Department.

Indicate whether or not business is conducted in Maryland.

Provide the date business began in Maryland.

Provide a short description of the activity of the business

(i.e., “restaurant” or “construction,” etc.)

If the business operates on a fiscal year provide the start

and end date. If it operates on a calendar year, you may

leave this item blank.

Provide the total gross sales generated from business

transacted in the State of Maryland for the calendar year

preceding the date of finality.

If the business does not own, lease, or use any tangible

personal property in Maryland, but has generated any

amount of gross sales, please provide an explanation of

how the business operates in Maryland without any

tangible personal property. If the business is using the

personal property of another business entity, provide the

name, Department ID, and address of that business.

Use the REMARKS section to provide any additional

applicable information.

SECTION VI

SPECIAL INSTRUCTIONS FOR ITEMS 1-10

Must be completed by any business entity that responded

“Yes” to questions in Section III.

Location Information

Exact Location

Since local tax rates and exemptions differ in each county

and in each incorporated town, the physical location of the

tangible business personal property within Maryland as of

January 1st must be clearly indicated by the business.

Post Office Box numbers are not acceptable. If property

is located in an incorporated town, supply the name of the

town. An incorporated town has its own government and

defined municipal boundaries. Please see the attached

current list of counties and incorporated towns within each

county. Inventory is deemed permanently located where

the business is conducted. Although some jurisdictions

may exempt inventory from an assessment, entities that

require a Trader's License must report commercial

inventory in Question 2.

Multiple Physical Locations

If property is located in two or more locations, please

supply a breakdown per location by completing copies of

the Additional Locations Worksheet. The additional

locations worksheet can be found on our website

https://dat.maryland.gov/Pages/sdatforms.aspx

For ease in reporting, entities may upload additional

schedules up to 50MB when filing through Maryland

Business Express. All uploaded files must be in PDF format

when filing through Maryland Business Express.

For businesses that currently provide excel worksheets and

would prefer to continue, please email your supporting data

to sdat.persprop@maryland.gov

Always include the complete name of the entity and the

Department ID number.

Furniture, Fixtures, Tools, Machinery and Equipment not

used for Manufacturing or Research and Development

This property shall be reported at original cost by year of

acquisition without depreciation, investment credit, or trade-

in of previously owned property. Include all fully

depreciated and property expensed under IRS rules.

This includes, but is not limited to, office furniture, fixtures

and equipment, factory equipment and machinery, shelves,

signs, counters, etc. All property is to be reported under

Category A unless specifically listed in another category.

Property reported in columns B through G requires a

detailed description (e.g., Column C- Copiers, Fax, etc.).

Failure to provide the required detail will result in the

reported property being assessed at 10% rate of

depreciation.

Refer to the Depreciation Rate List below to determine

where property owned by the business should be reported

(See, Example, below.)

This property shall be reported at original cost by year of

acquisition without deduction of depreciation, investment

credit, or trade-in of previously owned property. Include all

fully depreciated personal and property expensed under

IRS rules.

Example:

ORIGINAL COST BY YEAR OF ACQUISITION

SPECIAL DEPRECIATION RATES B-G (See

chart)

TOTAL

COST

2014

2013

1150

12800

13,950

2012

3104

8400

11,504

2011

1500

5261

6,761

2010

2009

2500

2,500

2008

9127

500

9,627

2007 &

prior

Totals

14881

3000

5261

21200

44,142

Describe property identified in B - G above: Category D-2011 Personal

Computer; Category E-2012,2013 RentalDVDs,,Video Tapes, 2008 Vending

Machine; Category C - 2009 Copier $2,000, Fax $500

Commercial Inventory

Commercial Inventory is merchandise and stock in trade

available for sale. This includes manufactured products

sold at retail by the manufacturer. An average of twelve

(12) monthly inventories should be reported. Book

inventories may be used for months when physical

inventories were not taken. Values are to be reported at

cost or market value. LIFO method of valuation is

prohibited.

Business entities that need a Trader’s License (retail

sales) must report commercial inventory!

"If you are unsure of whether this applies to you,

please contact your county's Clerk of the Court

at https://www.courts.state.md.us/pia/clerks. Maryland

Form 1 Instructions

Page 6 of 9

Annotated Code, Business Regulation Article

§17-1808 allows counties and municipalities to

adopt a Uniform Trader's License Fee."

Form 1 Instructions

Page 7 of 9

Supplies

Supplies are consumable items not held for sale (e.g.,

contractor's supplies, office supplies, etc.). Report the

average cost.

Manufacturing/Research and Development (R&D)

Supplies

Manufacturing/Research and Development (R&D)

Inventory is raw materials, supplies, goods in process and

finished products used in and resulting from

manufacturing/R&D by the business. Include manufactured

products sold at retail by the manufacturer in item 2

Commercial Inventory.

An average of twelve (12) monthly inventories should be

reported. Book inventories may be used for months when

physical inventories were not taken. Values are to be

reported at cost or market value.

Tools, Machinery and Equipment used for Manufacturing

or Research and Development(R&D)

Exemption Application Requirements: If the exemption is

claimed for the first time, an Exemption Application for

Manufacturing and Research & Development must be

submitted within 6 months after the date of the first

assessment notice for the taxable year that includes the

manufacturing personal property, or September 1 of the

affected assessment year, before the exemption can be

granted.

For more information as well as the application form, visit

the Department's website at https://dat.maryland.gov.

Proceed to the Businesses section, Business Personal

Property and then Quick References. Reporting property

on this line item is not a substitute for a manufacturing

application.

Vehicles

Itemize motor vehicles with Interchangeable Registrations

and vehicles that are unregistered (unlicensed).

Vehicles registered in Maryland and classified A-P are

exempt and should not be reported on the Personal

Property Tax return. Vehicles registered outside Maryland

may also be exempt. Exempt vehicles include those

registered in another taxing jurisdiction and of a

classification (A-P) described in Title 13, Subtitle 9, Part II

of the Maryland Transportation Article.

Interchangeable Registrations include: dealer plates

(Class 1A, 1B, 1C); recycler plates (Class 2); finance

company plates (Class 3); special mobile equipment

plates (Class 4); and transporter plates (Class 5).

This property shall be reported at original cost in the year

of acquisition without deduction or depreciation, investment

credit, or trade-in of previously owned property. Include all

fully depreciated personal property and property expensed

under IRS rules.

Motor vehicles with Interchangeable Registrations and

unregistered/unlicensed vehicles are not exempt and will

be assessed as Category C property at 20% depreciation

per annum (subject to a minimum assessment of 25% of

the original cost).

Non-farming Livestock

Report book value and market value.

Other Tangible Personal Property

Include other tangible personal property not reported

elsewhere on this return. Report total cost on the return and

supply a separate schedule including a description, the

original acquisition cost, and the date of acquisition of the

property. Please see additional instruction under Other

Personal Property Assessment Exemptions.

Qualified Data Centers as described in

2020 SB 397 and Tax General Art. § 11-239

of the Annotated Code of Maryland, should

report their personal property under All other

personal property and attach a detailed

schedule

Property Owned by Others and Used or Held by the

Business

All property that is not owned by the business but is held by

the business as lessee, on consignment, or otherwise must

be reported.

File separate schedule showing names and

addresses of owners, lease number, description of

property, installation date and cost of each leased

asset.

10.

Property Owned by the Business and Used or Held by

Others

All property that is owned by the business but is held by

others as consignee, lessee or otherwise must be reported.

All leased property must be reported, including

manufacturing equipment, and property leased to tax

exempt organizations.

Manufacturer lessors shall report property which has been

acquired other than by purchase at the retail selling price in

the year the property was manufactured (including property

manufactured by a business for its own use). Manufacturing

lessors may not report this property using the cost of

manufacture.

A separate schedule showing the names and addresses of

lessees, lease numbers, description of property, installation

date and original cost by year of acquisition for each

location must be supplied. Provide the physical street

address of lessees. Post Office Box numbers are not

acceptable.

Excel schedules of leasing data may be

submitted. Verify that the entity name and ID

number are prominent on the schedule.

Schedule may be filed electronically and

submitted to sdat.persprop@maryland.gov

Please note that a Form 1, Annual

Report/Business Personal Property Tax

Return are still required.

SECTION VII

All Businesses must complete A-C

A. If this is the entity’s first Maryland business

personal property return, state whether or not it succeeds

an established business and provide the name of the

business.

B. Although it may be common practice not to report

fully depreciated and/or expensed property on the Federal

Income Tax Return, it should be reported on the Business

Personal Property Return and is subject to assessment. If

the business owns any fully depreciated and/or expensed

personal property, and it is not reported in Section VII,

please complete Form SD1. It may be necessary to include

a schedule that contains detailed description of the

personal property, the original cost, and the year of

acquisition.

C. If the business has disposed of or transferred assets in

to or out of Maryland during the prior year, please complete

Form SD1 and provide the cost of the disposed/transferred

property, the manner of disposal, and to whom the property

Form 1 Instructions

Page 8 of 9

was transferred. Please provide sales agreements,

settlement sheets or other supporting documentation.

TRANSFER OF PROPERTY

If a business transfers, sells, or disposes of all personal

property on or after January 1, but before July 1, the

Department must be notified in writing on or before

October

1. The notification must contain an itemized description

of the property involved, the date and manner of

transfer, the name(s) and address of the new owner(s)

of the property, the consideration received, and a copy

of the

Form 1 Instructions

Page 9 of 9

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

Form 1 Instructions

Page 10 of

assessment and taxation. These include aircraft, farming

implements, residential (non-business) property, most

registered vehicles, boats not more than 100 feet in length,

customized computer software, intangible personal

property (e.g., stocks, bonds, patents, goodwill,

trademarks, etc.).

Full or partial exemptions may apply depending on the

location of the property for: manufacturing/R&D machinery

and equipment, manufacturing/R&D inventory and

commercial inventory. Visit the Department’s website for a

complete listing of these exemptions.

Tax Property Article § 7-245

A person’s (any business entity’s) personal property is

not subject to valuation or to property tax if ALL of the

person’s personal property statewide has a total original

cost less than $2500. This exemption shall take effect

July 1, 2018, and shall be applicable to all taxable years

beginning after December 31, 2018.

NOTES:

Mail the completed return to:

Maryland Department of Assessments and Taxation

Business Personal Property

PO Box 17052

Baltimore, Maryland 21297-1052

All other correspondence, including Amended Returns,

should be sent to:

Maryland Dept. of Assessments and Taxation

Business Personal Property

301 W. Preston Street

Baltimore, Maryland 21201-2395

Form SD1 is a supplemental detail form and may not apply

to all entities. It may not be necessary for you to complete

one. It may only be required under certain circumstances

such as the following:

Disposals and transfers

Expensed property

Exempt property/Exempt organizations

Amended returns

The form can be found online at

https://dat.maryland.gov/Pages/sdatforms.aspx

HELPFUL LINKS

SDAT ONLINE FORMS:

https://dat.maryland.gov/Pages/sdatforms.aspx

DEPARTMENT ID NUMBER SEARCH:

https://egov.maryland.gov/BusinessExpress/EntitySearch

REQUEST A PERSONAL PROPERTY EXTENSION:

http://pprextensions.dat.maryland.gov/

FILE CURRENT & PRIOR YEARS PERSONAL

PROPERTY RETURNS ONLINE: To use this system you

must create an account

https://egov.maryland.gov/BusinessExpress/Account/LogO

n?ReturnUrl=%2fBusinessExpress%2fUserRegistration

FEDERAL EMPLOYER IDENTIFICATION NUMBER

LOOKUP:

https://www.irs.gov/businesses/small-businesses-self-

employed/employer-id-numbers

FEDERAL PRINCIPAL BUSINESS CODES LOOKUP:

https://www.irs.gov/pub/irs-pdf/i1040sc.pdf

(See pages C-16 and C-17 of IRS Publication Schedule C

Instructions)

DEPRECIATION RATE CHART

STANDARD DEPRECIATION RATE

Category A: 10% per annum*

All property not specifically listed below.

SPECIAL DEPRECIATION RATES (The rates below apply only to

the items specifically listed. Use Category A for other assets.)

Category B: 20% per annum*

Mainframe computers originally costing $500,000 or more.

Category C: 20% per annum*

Autos (unlicensed), bowling alley equipment, brain scanners, car

wash equipment, contractor's heavy equipment (tractors,

bulldozers), fax machines, hotel, motel, hospital and nursing home

furniture and fixtures (room and lobby), MRI equipment, mobile

telephones, model home furnishings, music boxes, outdoor

Christmas decorations, outdoor theatre equipment, photocopy

equipment, radio and T.V. transmitting equipment, rental pagers,

rental soda fountain equipment, self-service laundry equipment,

stevedore equipment, theatre seats, trucks (unlicensed), vending

machines, x-ray equipment.

Category D: 30% per annum**

Data processing equipment and other computer based equipment,

canned software.

Category E: 331I3% per annum*

Blinds, carpets, drapes, shades. The following applies to equipment

rental companies only: rental stereo and radio equipment, rental

televisions, rental video cassette recorders and rental DVDs and

video tapes.

Category F: 50% per annum*

Pinball machines, rental tuxedos, rental uniforms, video games.

Category G: 5% per annum*

Boats, ships, vessels, (over 100 feet).

Long-lived assets

Property determined by the Department to have an expected life in

excess of 10 years at the time of acquisition shall be depreciated at

an annual rate as determined by the Department.

* Subject to a minimum assessment of 25% of the original cost.

** Subject to a minimum assessment of 10% of the original cost.

Form 1 Instructions

Page 11 of

MARYLAND COUNTIES AND INCORPRATED TOWNS

THE FOLLOWING IS A LIST OF COUNTIES AND INCORPORATED TOWNS IN MARYLAND. IF A BUSINESS OWNS

PROPERTY IN ANY OF THESE LOCATIONS, THE LOCATION SHOULD BE LISTED IN SECTION VI, A OF THE

PERSONAL PROPERTY RETURN.

ALLEGANY

CECIL

GARRETT

PRINCE GEORGE’S

ST. MARY’S

Barton

Cecilton

Accident

Berwyn Heights

Leonardtown

Cumberland

Charlestown

Deer Park

Bladensburg

Frostburg

Chesapeake City

Friendsville

Bowie

SOMERSET

Lonaconing

Elkton

Grantsville

Brentwood

Crisfield

Luke

North East

Kitzmiller

Capitol Heights

Princess Anne

Midland

Perryville

Loch Lynn Heights

Cheverly

Westernport

Port Deposit

Mountain Lake Park

College Park

TALBOT

Rising Sun

Oakland

Colmar Manor

Easton

ANNE ARUNDEL

Cottage City

Oxford

Annapolis

CHARLES

HARFORD

District Heights

Queen Anne

Highland Beach

Indian Head

Aberdeen

Eagle Harbor

St. Michaels

La Plata

Bel Air

Edmonston

Trappe

BALTIMORE CITY

Port Tobacco

Havre de Grace

Fairmount Heights

Forest Heights

WASHINGTON

BALTIMORE COUNTY

DORCHESTER

HOWARD

Glenarden

Boonsboro

No incorporated cities or towns

Brookview

No incorporated cities or towns

Greenbelt

Clear Spring

Cambridge

Hyattsville

Funkstown

CALVERT

Church Creek

KENT

Landover Hills

Hagerstown

Chesapeake Beach

East New Market

Betterton

Laurel

Hancock

North Beach

Eldorado

Chestertown

Morningside

Keedysville

Galestown

Galena

Mt. Rainier

Sharpsburg

CAROLINE

Hurlock

Millington

New Carrollton

Smithsburg

Denton

Secretary

Rock Hall

North Brentwood

Williamsport

Federalsburg

Vienna

Riverdale Park

Goldsboro

MONTGOMERY

Seat Pleasant

WICOMICO

Greensboro

FREDERICK

Barnesville

University Park

Delmar

Henderson

Brunswick

Brookeville

Upper Marlboro

Fruitland

Hillsboro

Burkittsville

Chevy Chase, Sec. 3

Hebron

Marydel

Emmitsburg

Chevy Chase, Sec. 5

QUEEN ANNE’S

Mardela Springs

Preston

Frederick

Chevy Chase View

Barclay

Pittsville

Ridgely

Middletown

Chevy Chase Village

Centreville

Salisbury

Templeville

Mount Airy

Garrett Park

Church Hill

Sharptown

Myersville

Glen Echo

Millington

Willards

CARROLL

New Market

Kensington

Queen Anne

Hampstead

Rosemont

Laytonsville

Queenstown

WORCESTER

Manchester

Thurmont

Martin’s Additions

Sudlersville

Berlin

Mount Airy

Walkersville

North Chevy Chase

Templeville

Ocean City

New Windsor

Woodsboro

Poolesville

Pocomoke City

Sykesville

Rockville

Snow Hill

Taneytown

Somerset

Union Bridge

Takoma Park

Westminster

Town of Chevy Chase

Washington Grove

Form 1 Instructions

Page 12 of

FORM 1 – FREQUENT FILING MISTAKES

Avoid these common errors to help ensure the efficient filing and processing of your personal property return.

Location Reporting Errors

-Not providing a breakdown of property by multiple locations.

-Inaccurate or missing address information, especially regarding towns.

-Reporting the mailing address instead of the actual property location in Section VI, A of Form 1, Business Personal Property

Tax Return.

-Reporting property not located in Maryland.

Property Reporting Errors

-Property reported in wrong depreciation category; or failing to describe assets reported in categories B through G.

-Failure to report commercial inventory which may cause problems with business license renewals.

-Reporting certain exempt registered vehicles as taxable in Section VI, under line item 1 or 6. Some registered vehicles are

taxable, such as those with interchangeable registrations.

-Failure to meet the September 1

deadline for manufacturing applications. Please see specific instructions under Manufacturing

Exemptions.

-Failure to notify the Department by October 1st when a transfer/sale/disposal of all personal property occurs between January

1st and June 30th. See website for Form 21, Report of Sale or Transfer.

Annual Report and Other Errors

-Filing under the wrong Department ID#, especially after a merger, dissolution or when several entities under the same

management or ownership are involved.

-Filing the Form 1 for the incorrect year resulting in rejection or duplicate receipts.

-Filing fee check missing, made out for incorrect amount, or made out to the Comptroller.

-Attempting to pre-pay an anticipated late filing penalty. These penalties are billed at the time the assessment is made.

-Forms not signed by officer/principal.

-Officers/directors names omitted from corporate return.

-Incorrect page 1 information (old address, wrong officers/directors, etc.), especially when software is used to prepare the return.

-Remitting business personal property tax payments to the Department instead of the county/town finance offices that generated

the bill.

Form 1 Instructions

Page 13 of