“Form 1”—Annual Report and Personal Property Tax Return—Will Be Updated
The Maryland State Department of Assessments and Taxation (SDAT) is streamlining the annual business filing process in Maryland by updating the paperwork all entities are required to file with the state. The current “Form 1” will be separated into an “Annual Report” and a “Personal Property Tax Return,” which more clearly distinguishes the dual purposes of this filing. The majority of Maryland entities do not have personal property and will not be required to complete that section. Additionally, three forms that pertain only to entities with personal property will also be eliminated, simplifying the filing process and reducing the amount of paperwork to be completed by most Maryland business owners. Once Maryland Business Express is updated in January to reflect these improvements, businesses may file their 2018 Annual Reports and Personal Property Tax Returns online.
Most Maryland Businesses Can File Online Extensions Now!
Unless an extension is requested, all domestic and foreign entities must file these documents on or before April 16 to remain in “good standing” and legally operate in the state. More than a decade ago, SDAT began accepting extension requests online and now less than two dozen requests are submitted using the paper form. Therefore, beginning in 2018 the Department will only accept extension requests submitted through the online extension system. If a business was recently created, users will still need to wait until February 1 to access the portal, but if a business was created prior to December 1, 2017 users may request an extension now—two months earlier than in past years.
Changes to the Annual Report and Personal Property Tax Return – “Form 1”
Beginning in 2018, the Department will be separating the Annual Report and Personal Property Tax Return filings, which historically have been combined in Form 1. All business entities will still be required to file a two-page Annual Report, and directions within that document will determine whether or not they must also attach a Personal Property Tax Return. The majority of business owners—roughly 200,000— do not actually own any personal property and will not be required to complete that section. A Personal Property Tax Return must be included if:
- The business owns, leases, or uses personal property located in Maryland; or
- The business maintains a trader’s license with a local unit of government in Maryland.
Although the form is being revised and streamlined, the methods for filing will not change. The simplest and easiest method is through Maryland Business Express (MBE), SDAT’s award-winning platform for creating a business, making annual filings, and requesting document copies online. MBE will be updated with the revised form in January. As customers answer the prompts in filing their Annual Report electronically, MBE will automatically identify whether a Personal Property Tax Return should also be completed. Otherwise, business owners may continue to submit their Annual Report and Personal Property Tax Returns by mail, or file in person at our West Preston Street office in Baltimore City.
Additional Changes for Entities with Personal Property
Three forms that pertain only to entities with personal property will also be eliminated beginning in 2018. These forms are too detailed and rigid for filers to easily submit information, and any information relevant to the Personal Property Tax Return can still be submitted as an attachment and may be requested by our Department. The three forms to be eliminated are:
- Form 4A Balance Sheet,
- Form 4B Depreciation Schedule, and
- Form 4C Disposal & Transfer Reconciliation.
Resources for Maryland Businesses
SDAT strongly recommends that all business owners sign up for our distribution list to receive timely reminders to file these important documents or tax credit applications, or to receive general SDAT news updates.
To view entity filings for free online and review the legal status of your business, access our Maryland Business Express Entity Search.
For additional questions about any of the information in this release, please contact SDAT’s Personal Property Valuation Unit at SDAT.PersProp@Maryland.gov or (410) 767-1170.