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Don’t put off your Maryland personal property returns.
Running a business in Maryland comes with several administrative responsibilities, and one of them is filing your Maryland business personal property return. This annual requirement ensures that your company remains in good standing with the state and that your property taxes are accurately assessed. Whether you’re a small business owner or managing a larger operation, understanding what to list, how to avoid common mistakes, and when to file is key to staying compliant.
What Are Maryland Business Personal Property Returns?
In Maryland, all businesses—corporations, LLCs, partnerships, and sole proprietorships—must file an annual business personal property return with the Maryland Department of Assessments and Taxation (SDAT). This filing lists all tangible personal property owned, leased, or used by your business as of January 1 each year.
Tangible property refers to items used in your daily operations, such as:
- Office furniture and equipment
- Computers, printers, and technology devices
- Machinery and tools
- Inventory (for certain businesses)
- Leasehold improvements
Filing this return keeps your business in “good standing” with the state, which is essential for maintaining licenses, permits, and the ability to do business legally.
What to List on Your Maryland Business Personal Property Return
When preparing your return, accuracy and completeness are essential. You’ll need to list all tangible personal property that was owned or in use by your business as of January 1. Here’s a breakdown of what to include:
- Office and Business Equipment: Include desks, chairs, filing cabinets, computers, copiers, and similar assets.
- Machinery and Tools: Any equipment used in production, repair, or service delivery should be listed.
- Vehicles (if titled to the business): In some cases, vehicles used primarily for business purposes must be included.
- Leasehold Improvements: Any upgrades or modifications made to a leased property.
- Supplies and Inventory: If applicable, include materials that are on hand and not yet sold or used.
Be sure to include the acquisition cost and year purchased for each item to help SDAT properly assess its depreciated value.
Common Errors to Avoid
Even experienced business owners can make mistakes on their Maryland business personal property returns. Avoiding these pitfalls will save you time and potential penalties:
- Missing the Filing Deadline: Returns are due by April 15 each year. Late filings can result in fines and loss of good standing.
- Omitting Leased or Loaned Property: Businesses often forget to list property leased from another company or loaned equipment still in use.
- Using Incorrect Valuation: List the original acquisition cost, not the depreciated book value. SDAT calculates depreciation separately.
- Not Reporting Disposed Assets: If you sold, scrapped, or donated equipment, you must report that disposal so you’re not taxed on property you no longer own.
- Failing to File at All: Some businesses assume that if they have no personal property, they don’t need to file. However, you must file a “zero report” to remain compliant.
Calendar Reminders and Key Dates
To make sure your Maryland business personal property return is filed on time, keep these dates in mind:
- January 1: Assessment date for all tangible personal property.
- April 15: Filing deadline for all returns.
- Extensions: Businesses may request a two-month extension (until June 15) if needed, but the request must be made before April 15.
- Good Standing Check: Each year, verify that your business remains in good standing with SDAT to avoid disruptions in licensing or contracts.
Set digital calendar reminders for March 1 (start preparing), April 1 (final review), and April 10 (file or request an extension) to stay on track.
Staying Compliant with Maryland SDAT
Filing your Maryland business personal property return accurately and on time helps you avoid penalties, maintain good standing, and ensure fair property assessments. Many businesses choose to work with an accountant or bookkeeper familiar with Maryland tax law to streamline the process and reduce the risk of errors.
By knowing what to list, steering clear of common mistakes, and marking your calendar for key filing dates, you can keep your business compliant and focused on growth.
Trust the Professionals at the Harding Group
Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for consultations and strive for open communication with our clients.
Are you interested in business advising, tax preparation, bookkeeping and accounting, payroll services, training + support for QuickBooks, or retirement planning? We have the necessary expertise and years of proven results to help.
We gladly serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of tax time, contact us online or give us a call at (410) 573-9991 for a free consultation. Follow us on Facebook, Twitter, YouTube, and LinkedIn for more tax tips.