Small businesses with less than $20,000 in assets are now exempt from MD personal property tax

By JD Howlette Law
Small business word cloud

On July 11, 2022, the Maryland State Department of Assessments & Taxation (SDAT) announced that Maryland businesses with less than $20,000 in personal property assets are now exempt from the annual personal property tax assessment under HB268. The new legislation officially took effect on June 1, 2022, raising the tax exemption threshold from $2,500 to $20,000.

Now, more than 42,000 small businesses in Maryland will not have to pay taxes on roughly $55 million in assessments. However, all Maryland businesses will still be required to file an annual personal property return with SDAT regardless of their exemption status.

Self-Certification

Beginning in 2023, businesses 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 will relieve small businesses throughout the state from the significant burden of tracking the original cost and year-after-year depreciation for personal property totaling less than $20,000.

Late-Filing Penalties Abated for 2022 Returns

SDAT has abated the late-filing penalties previously assessed on 2022 business personal property returns that reported less than $20,000. SDAT will also be issuing refund checks in the mail to those eligible businesses that paid the late-filing penalty assessments.