The Maryland State Department of Assessments and Taxation (SDAT), has raised the exemption from personal property assessment for all Maryland businesses from $2,500 to $20,000 under House Bill 268. This legislation is an extension of House Bill 90, which the SDAT endorsed in 2018 and exempted 28,493 businesses from $10.8 million in assessment.
House Bill 268 took effect on June 1, 2022, and will save 14,217 businesses from paying taxes on $44.2 million in assessment. This will be effective for tax years starting after June 30, 2022, and includes annual filings submitted as early as January 2022. Assessments of filings that were submitted between January 1, 2022, and June 30, 2022, will automatically be adjusted by the SDAT so that reported business personal property less than $20,000 is not assessed.
Late filing penalties that were previously billed on 2022 business personal property returns reporting less than $20,000 have been abated. Any filers who have already paid a late filing penalty billed on a return filing reporting less than $20,000 are being mailed a refund check for the penalty paid.
Starting in 2023, filers with a total original cost of personal property less than $20,000 will be able to self-attest on their Annual Report that their personal property falls within the exemption range and will no longer be required to submit a return detailing their personal property.
This bill is aimed to deliver tax relief to small and home-based businesses among economic uncertainty due to the pandemic. Strengthening Maryland’s small businesses will contribute directly to the growth of the economy on a local, state and national level.
If you have any questions on Maryland’s exemption from personal property assessment, please contact your BSSF advisor.
About the Author
Ryan Harshman, CPA, is a Manager at Brown Schultz Sheridan & Fritz (BSSF). He graduated from the University of Maryland with a Bachelor of Science in Accounting and Finance and an Honors College Citation. Ryan has experience with many facets of accounting, including financial statement and tax preparation services for a wide range of industries, including auto dealers, distributors, nonprofits, and local governments.