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

                           Maryland  State Department of Assessments and Taxation, Taxpayer Services Division  
                Business Personal Property Division, 301 West Preston Street Room 801, Baltimore Maryland 21201   - 1052 

   WHO MUST FILE THE ANNUAL REPORT                                   Filings may also be submitted by mail. Be sure to sign the 
                                                                     Annual Report and include a check or  money order for the 
   The Annual Report is a required filing for all business           full amount of any required filing fee. Send the completed 
   entities, regardless of whether the business owns property,       package to: 
   generates income or has conducted business activity in            Maryland Dept. of Assessments and Taxation 
   Maryland during the preceding year. This includes the             Annual Report 
   following entity types, both Domestic and Foreign:                PO Box 17052 
       o     Stock, Tax Exempt Non-Stock, Non-Stock,                 Baltimore, Maryland 21297-1052 
             Religious, Close, Benefit and Professional 
             Corporations,                                           All other correspondence, such as Amended Annual 
       o     Limited Liability Companies & BenefitLLCs,              Reports, or certified/return receipts, should be sent 
       o     Limited Liability Partnerships, Limited Partnerships    to: 
             & Limited Liability LimitedPartnerships,                Maryland Dept. of Assessments and Taxation 
       o     Statutory (Business Trusts Trusts), Real Estate         Charter/Legal Division                     
                                                                                              
             Investment                                              301 W. Preston Street, Room 808 
                                                                     Baltimore, Maryland 21201-2395 
   Failure to file the Annual Report may result in forfeiture of 
   the entity’s right to conduct business in the State of            REMINDER: To ensure proper filing, include your SDAT 
   Maryland.                                                         Department ID on your report, where requested, and on all 
                                                                     communications with SDAT. Annual Reports filed without  a 
   WHEN TO FILE                                                      Department ID may not be accepted, causing delays and 
                                                                     possible late fees. 
   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         INFORMATION and ASSISTANCE 
   business (COB) on the Monday following will be considered 
   timely.                                                           PERSONAL PROPERTY UNIT 
                                                                     General information: 410-767-1170 
   You may request a 60 day extension of the filing deadline,        Form preparation and assessment information 
   at no cost, by visiting the Personal Property Extension site      Online Extensions: http://pprextensions.dat.maryland.gov/ 
   at http://pprextensions.dat.maryland.gov/ Extension               E-mail Address: SDAT.PersProp@Maryland.gov 
   requests must be made on or before April 15th. 
   Increased use of this site is anticipated as April 15th           CHARTER UNIT 
   approaches, so SDAT suggests you apply for an extension           Charter Information: 410-767-1330 
   as soon as the site opens in December. Paper extensions           Incorporated, Qualifications, Revivals & 
   are no longer accepted by the department.                         Dissolutions: 410-767-1350 
                                                                     E-mail Address: SDAT.CharterHelp@Maryland.gov 
   HOW & WHERE TO FILE 
                                                                     Department Website: https://dat.maryland.gov 
   You may file online through the Maryland Business                 Toll Free within Maryland: 1-888-246-5941 
   Expresssystem,                                                    Maryland Relay Service (MRS): 1-800-735-2258 TT/VOICE 
   https://egov.maryland.gov/BusinessExpress                         (MRS for speech and hearing impairment) 

   Filings  may be submitted in person by visiting our Public  
   Services Center at our Headquarters in Baltimore. The             FILING FEES 
   address is: 
   State of Maryland - State Center                                  The filing fee for most business entities is $300. The fee 
   301 W. Preston Street, Room 801                                   must accompany the Annual Report in order for the report 
   Baltimore, Maryland 21201                                         to be accepted by SDAT. Failure to include the filing fee 
                                                                     may result in SDAT not accepting the report which may 
                                                                     cause delays and/or late filing fees. 

       Form 1 Instuctions 2020                                                                                           Page 1 of 9

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          TYPE OF BUSINESS             ID# PREFIX    FILING FEE   The business’ mailing address may also be changed when 
                                                                  submitting the Annual Report. Insert the new mailing 
Domestic Stock Corporation                     D        $300      address in the address fields inSection I   , and check the 
Foreign Stock Corporation                      F        $300      box to indicate that this is “a change of mailing address.” 
                                                                    A business’   mailing address  may  be any US   Post Office 
Domestic Non-Stock Corporation                 D         $0       recognized address, including non-Maryland addresses, 
Foreign Non-Stock Corporation                  F         $0       addresses in foreign countries and post office boxes. 
Foreign Insurance Corporation                  F        $300      PERIOD COVERED BY ANNUAL REPORT AND 
Foreign Interstate Corporation                 F         $0       PERSONAL PROPERTY TAX RETURN 

Domestic Limited Liability Company          W           $300      All reports cover the calendar year regardless of the 
Foreign Limited Liability Company              Z        $300      business’ fiscal year. All information required to be 
                                                                  reported shall be as of January 1of the filing year, also 
Domestic Limited Partnership                   M        $300      known as the date of finality  , except for items which 
Foreign Limited Partnership                    P        $300      specifically ask for information from prior years. 
Domestic Limited Liability Partnership         A        $300 
Foreign Limited Liability Partnership          E        $300      COMPLETING THE ANNUAL REPORT 
Domestic Statutory Trust                       B        $300      To start your Annual Report (Form 1), check the 
Foreign Statutory Trust                        S        $300      appropriate box for the business type at the top of the form 
                                                                  and note the associated filing fee for your business type. 
Real Estate Investment Trust                   D        $300 
                                                                  SECTION I  
SDAT Certified Family Farm             A,D,M.W          $100 
Amended Returns                           ALL            $0       All business entities must complete this section. If any item 
                                                                  does not apply, leave that item blank or insert “N/A.” 
The filing fee must be paid regardless of whether the 
business owns property in Maryland, generates any income          Provide the full, legal name of the business entity, including 
in Maryland or conducts any business in Maryland.                 any tails or endings such as Inc. or  LLC. (Required  ) 
Checks and money orders should be made payable to                 Provide the complete mailing address for the business. If 
“SDAT” and include the SDAT Department ID to ensure               this   is a new mailing address, check the box to the left. 
credit to the proper account. 
Corporations not authorized to issue capital stock are not        You cannot change the Principal Officeor Resident 
required to pay a filing fee.                                     Agent address using this method. Please consult website 
The filing fee for SDAT Certified Family Farms   is $100          for instructions. 
beginning the year followingits election to become a 
Family Farm.                                                      Provide the SDAT Department ID. If you do not know your 
                                                                  Department ID, you can look it up on Maryland Business  
LATE FILING PENALTIES                                             Express: 
                                                                  (https://egov.maryland.gov/BusinessExpress/EntitySearch.) 
  If the business  files its Annual Report after the deadline, it The ID number is necessary to ensure proper credit to your 
may be subject to late filing penalties. The penalties            account. 
cannot be prepaid and can only be calculated after the 
Personal Property Tax Return is filed. If the business   is       Provide the entity’s FEIN (federal tax identification number 
assessed any late filing penalties, it will be notified by mail   obtained from the IRS). 
after the assessment is complete. The following minimum  
                                                                  Provide the business entity’s Federal Principal Business  
and maximum initial (base) penalty amounts apply: 
                                                                  Code (obtained from the IRS). 
     Days Late                 Minimum           Maximum          Provide the nature of business. 
        01-15                     $30            $500  
        16-30                     $40            $500             Provide the trading-as-name (DBA) that the business uses, 
     31 or more                   $50            $500             if any. 
A business which files theForm 1 after the April 15th due         Provide an email address in order to receive important 
date (June 15 for those with approved extensions), will           reminders from SDAT.  
receive an initial penalty of 1/10 of one percent of the 
county assessment,  or the base penalty, whichever is             SECTION II  
greater. Interest will accrue at the rate of 2% of the initial    Only complete this section if the business entity is a 
penalty amount for each thirty (30) day period, or part           corporation (domestic   or foreign). If the business entity is 
thereof, that the  Form 1 is late.                                not a corporation, skip this section and proceed to Section 
                                                                  III   . 
WHAT  ADDRESS TO USE  

For the purpose of the Annual Report and Personal 
Property Tax Return, provide the business’  mailing address  
in Section Iof the Form 1. 

     Form 1 Instructions 2020                                                                                  Page 2 of 9

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Provide the names and mailing addresses of all important information regarding the Form SD1.
corporate officers. All domestic corporations must have a SECTION IV
President, Secretary and Treasurer. Attach additional
pages if necessary. This is the signature part of the form and all business
entities must complete this section.
Provide the names of all corporate directors. All Maryland
corporations (except Close corporations) must have at If you are mailing the form, original signatures are required.
least one director. Religious corporations should list the Photocopies, confirmed signatures, faxes, scans or any type
names of all Trustees here. Attach additional pages if of signature other than an original, ink signature are not
necessary. acceptable. This form is signed under oath and subject to the
penalties of perjury.
Due to the passage of Chapter 513 during the 2019
General Assembly Session a new request for data has Please review it carefully for accuracy before you sign and
been included on the 2020 Form 1. The Total number of submit it!
Directors, Total number of Female Directors only applies
to tax exempt, domestic non-stock corporations with an This item must be completed by all business entities. If this
operating budget exceeding $5,000,000; or domestic stock item is left blank, the Annual Report will be considered
corporations with total sales exceeding $5,000,000. If one incomplete and will not be accepted. Print the name of the
of the former applies to the corporation, this questions person signing on behalf of the business. The date should
must be completed unless at least 75% of the be the date the form is signed. Include a phone number and
corporations’s shareholders are family members. This email address so that we can contact you to resolve any
question is required by law, Tax-Property Article §11-101. potential discrepancies or errors quickly.
SECTION III Only complete the next signature line if you are preparing
the return for or on behalf of the business entity, and are
All business entities must complete this section. If the not a constituent of the business. This item generally
answer to all questions is“No”, only the Annual Report applies to accountants, tax preparers and attorneys.
must be filed with SDAT. Please proceed to Section
IV, SIGN, and return this Annual Report, with fee if
applicable, to the Department: ABOUT THE BUSINESS PERSONAL PROPERTY TAX
RETURN
Department of Assessments and Taxation, Charter Unit
P.O. Box 17052, Baltimore, MD 21297-1052 WHAT MUST BE REPORTED

Check “Yes” if the business entity owns, leases or uses Generally, all tangible personal property owned, leased,
any property other than real estate, intellectual property or consigned or used by the business, and located within the
vehicles registered with the MVA, and that property is State of Maryland on January 1 must be reported. Property
located in the State of Maryland. The term “Personal not in use must still be reported. All fully depreciated and
Property” specifically includes property owned by the expensed personal property must also be reported.
business, leased by the business or used by business, Personal property includes, but is not limited to, office and
even if that property is owned by another business or plant furniture, machinery, equipment, tools, furnishings,
individual. “Personal property” includes computers, trade fixtures, inventory, and all other property not
phones, cell phones, furniture, draperies, inventory, considered part of the real estate.
equipment, tools, machines, books, artwork, supplies and
fixtures. Only check “No” if the company does not use, Personal property in this State (other than operating
lease or own any property that is located in the State of property of Railroads and public Utilities) falls into two
Maryland. subclasses:
If you answered yes, but the personal property your entity
owns is exempt (religious groups, charitable or I. Stock in business or inventory is goods held by a
educational organizations), you will not have to complete taxpayer for sale, and goods placed on consignment to
the Business Personal Property Tax Return Portion. You another for sale, in the expectation of a quick turnover.
may wish to compelte the Form SD1. Note: The Stock in business does not include goods manufactured by
Business Personal Property Tax Return will have to be the taxpayer but held by the taxpayer for purposes other
completed if the entity leases personal property from than sale, or goods manufactured by the taxpayer but
others. placed in possession and control of another as in the case
of leased property.
Check “Yes” if the business has or is required to have a
Trader’s License (sometimes called a business license) Stock in business isassessed at cost or market value,
issued by the Circuit Court for the county or counties in whichever is lower. LIFO method of valuation is prohibited.
which the business has locations.
II. All other personal property includes all personal
If the business had gross sales in Maryland please property, other than inventory, andis reported at full cash
provide the amount of business transacted in MD. value.

If you answered yes to any of the questions and Taxpayers shall report such property which has been
the Form SD1 does not apply, the Business acquired by purchase at cost in the year of acquisition.
Personal Property Tax Return will have to be Taxpayers shall report such property which has been
completed. acquired other than by purchase (including property
See NOTES at the end of these instructions for manufactured by the taxpayer) at fair market value. To

Form 1 Instructions 2020 Page 3 of 9

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assess “all other personal property” the Department Must be completed by any business entity that responded
generally applies a 10% rate of depreciation per annum “Yes” to questions in Section III .
to the reported property. Exceptions to the 10% rate can
be found on the Depreciation Rate Chart on page six Location Information
(6).
Normally, property will not be depreciated below 25% of Exact Location
the original cost.
Since local tax rates and exemptions differ in each county
Estimated assessments may be issued when and in each incorporated town, the physical location of the
questions remain unanswered or the answers are tangible business personal property within Maryland as of
incomplete or evasive. Real property is not to be January 1st must be clearly indicated by the business. Post
reported on the return. Office Box numbers are not acceptable .

REPORTING COST OF PERSONAL PROPERTY If property is located in an incorporated town, supply the
Round amounts to the nearest whole dollar. Fifty cents name of the town. An incorporated town has its own
and above should be rounded to the next highest dollar. government and defined municipal boundaries. Please see
the attached current list of counties and incorporated towns
COMPLETING THE BUSINESS PERSONAL within each county. Inventory is deemed permanently
PROPERTY TAX RETURN located where the business is conducted. Although some
jurisdictions may exempt inventory from an assessment,
At the top of the Business Personal Property Tax entities that require a Trader's License must report
Return, copy the complete legal name of the business commercial inventory in Question 2.
and the Department ID from the first page in the spaces
provided. Multiple Physical Locations

This is required to correctly credit your account. If property is located in two or more locations, please
supply a breakdown per location by completing copies of
SECTION V the Additional Locations Worksheet . The additional
locations worksheet can be found on our website
All business entities complete. It is necessary to https://dat.maryland.gov/Pages/sdatforms.aspx
provide the business name and Department ID # so
that proper credit may be made to your account. For ease in reporting, entities may upload additional
schedules up to 50MB when filing through Maryland
Questions A through F Business Express. All uploaded files must be in PDF format
when filing through Maryland Business Express.
Must be completed by any business entity that
responded “Yes” to either question in Section III . For businesses that currently provide excel worksheets and
would prefer to continue, please email your supporting data
Provide the correct mailing address. Be sure it is the to sdat.persprop@maryland.gov
same address you provided on the Form 1, Annual
Report. Provide a current email address so that you can Always include the complete name of the entity and
receive important assessment updates from the the Department ID number.
Department. Indicate whether or not business is
conducted in Maryland. Provide the date business began 1. Furniture, Fixtures, Tools, Machinery and Equipment
in Maryland. Provide a short description of the activity of not used for Manufacturing or Research and
the business (i.e., “restaurant” or “construction,” etc.). Development . This property shall be reported at original
cost by year of acquisition without depreciation,
If the business operates on a fiscal year provide the start investment credit, or trade- in of previously owned
and end date. If it operates on a calendar year, you may property. Include all fully depreciated and property
leave this item blank. expensed under IRSrules.

Provide the total gross sales generated from business This includes, but isnot limited to, office furniture,
transacted in the State of Maryland for the calendar year fixtures and equipment, factory equipment and
preceding the date of finality. If the business does not machinery, shelves, signs, counters, etc. All property is
own, lease, or use any tangible personal property in to be reported under Category A unless specifically
Maryland, but has generated any amount of gross sales, listed in another category.
please provide an explanation of how the business Property reported in columns B through G requires a
operates in Maryland without any tangible personal detailed description (e.g., Column C- Copiers, Fax,
property. If the business is using the personal property of etc.). Failure to provide the required detail will result
another business entity, provide the name, Department in the reported property being assessed at 10% rate
ID, and address of that business. of depreciation. Refer to the Depreciation Rate List
below to determine where property owned by the
Use the REMARKS section to provide any business should be reported (See, Example, below.)
additional applicable information.
This property shall be reported at original cost by year
SECTION VI of acquisition without deduction of depreciation,
investment credit, or trade-in of previously owned
SPECIAL INSTRUCTIONS FOR ITEMS 1-10 property. Include all fully depreciated personal and

Form 1 Instructions 2020 Page 4 of 9

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property expensed under IRS rules. granted.

Example: For more information as well as the application form, visit
the Department's website at https://dat.maryland.gov.
ORIGINAL COST BY YEAR OF ACQUISITION Proceed to the Businesses section, Business Personal
SPECIAL DEPRECIATION RATES B-G (See TOTAL Property and then Quick References. Reporting property
chart) COST on this line item is not a substitute for a manufacturing
A B C D E F G application.
2014
2013 1150 12800 13,950 6. Vehicles
2012 3104 8400 11,504
2011 1500 5261 6,761 Itemize motor vehicles with Interchangeable Registrations
2010 and vehicles that are unregistered (unlicensed). Vehicles
2009 2500 2,500 registered in Maryland and classified A-P are exempt and
2008 9127 500 9,627 should not be reported on the Personal Property Tax return.
2007 & Vehicles registered outside Maryland may also be exempt.
prior Exempt vehicles include those registered in another taxing
Totals 14881 3000 5261 21200 44,142 jurisdiction and of a classification (A-P) described in Title
Describe property identified in B - G above: Category D-2011 13, Subtitle 9, Part II of the Maryland Transportation Article.
Personal Computer; Category E-2012,2013 RentalDVDs,,Video Interchangeable Registrations include: dealer plates
Tapes, 2008 Vending Machine; Category C2009- Copier $2,000, (Class 1A, 1B, 1C); recycler plates (Class 2); finance
Fax $500 company plates (Class 3); special mobile equipment
plates (Class 4); and transporter plates (Class 5).

2. Commercial Inventory This property shall be reported at original cost in the year of
acquisition without deduction or depreciation, investment
Commercial Inventory is merchandise and stock in credit, or trade-in of previously owned property. Include all
trade available for sale. This includes manufactured fully depreciated personal property and property expensed
products sold at retail by the manufacturer. An under IRS rules.
average of twelve (12) monthly inventories should be
reported. Book inventories may be used for months Motor vehicles with Interchangeable Registrations and
when physical inventories were not taken. Values unregistered/unlicensed vehicles are not exempt and will
are to be reported at cost or market value. LIFO be assessed as Category C property at 20% depreciation
method of valuation is prohibited . per annum (subject to a minimum assessment of 25% of
the original cost).
Business entities that need a Trader’s License
(retail sales) must report commercial inventory! 7. Non-farming Livestock

3. Supplies Report book value and market value.

8. Other Tangible PersonalProperty
Supplies are consumable items not held for sale (e.g.,
contractor's supplies, office supplies, etc.). Report the Include other tangible personal property not reported
average cost. elsewhere on this return. Report total cost on the return and
supply a separate schedule including a description, the
4. Manufacturing/Research and Development original acquisition cost, and the date of acquisition of the
(R&D) Supplies property. Please see additional instruction under Other
Personal Property Assessment Exemptions .
Manufacturing/Research and Development (R&D)
Inventory is raw materials, supplies, goods in process and 9. Property Owned by Others and Used or Held by the
finished products used in and resulting from Business
manufacturing/R&D by the business. Include manufactured
products sold at retail by the manufacturer in item 2 All property that is not owned by the business but is held by
Commercial Inventory. the business as lessee, on consignment, or otherwise must
An average of twelve (12) monthly inventories should be be reported. File separate schedule showing names and
reported. Book inventories may be used for months when addresses ofowners, lease number, description of property,
physical inventories were not taken. Values are to be installation date and cost of each leased asset.
reported at cost or market value.
10. Property Owned by the Business and Used or Held by
5. Tools, Machinery and Equipment used for Others
Manufacturing or Research and Development(R&D)
All property that is owned by the business but is held by
Exemption Application Requirements: If the exemption is others as consignee, lessee or otherwise must be reported.
claimed for the first time, an Exemption Application for All leased property must be reported, including
Manufacturing and Research & Development must be manufacturing equipment, and property leased to tax
submitted within 6 months after the date of the first exempt organizations.
assessment notice for the taxable year that includes the
manufacturing personal property, or September 1 of the Manufacturer lessors shall report property which has been
affected assessment year, before the exemption can be

Form 1 Instructions 2020 Page 5 of 9

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acquired other than by purchase at the retail selling price
in the year the property was manufactured (including If a business discontinues operations or goes out of
property manufactured by a business for its own use). business prior to January 1,and has not ﬁ led Articles of
Manufacturing lessors may not report this property using Dissolution (Domestic Corporations), an Application for
the cost of manufacture. Termination (Foreign Corporations), a Certiﬁcate of
Cancellation (LLC) or a Withdrawal Notice (LLP, LP) with
A separate schedule showing the names and addresses the Department’s Charter Division, a return or letter of
of lessees, lease numbers, description of property, explanation detailing the date the business ceased
installation date and original cost by year of acquisition operations and what happened to the property must be
for each location must be supplied. Provide the physical ﬁled. Failure to provide this information may result in
street address of lessees. Post Office Box numbers are an estimated assessment being made against the
not acceptable. business and the business not having good standing
status.
Excel schedules of leasing data may be submitted. Verify
that the entity name and ID number are prominent on the Businesses that have not ﬁled Articles of Dissolution, an
schedule. Schedule may be filed electronically and Application for Termination, a Certiﬁcate of Cancellation or a
submitted to sdat.persprop@maryland.gov Please note Withdrawal Notice are legally active until they do so, or until
that a Form 1, Annual Report/Business Personal their charters are forfeited (Domestic Corporations), or their
Property Tax Return are still required. authority to do business is forfeited (Foreign Corporations,
LLCs, LLPs, LPs, statutory trusts (formerly business trusts),
SECTION VII and REITs). See website Charter Business Servicesfor
frequently asked questions.
All Businesses must complete A-C
AUDIT OF RETURN
A. If this is the entity’s first Maryland business
personal property return, state whether or not it All personal property assessments, and any information,
succeeds an established business and provide the and ﬁgures reported on the personal property return,
name of the business. accompanying schedules and related documents are
subject to audit. As a result of such audits, the Department
B. Although it may be common practice not to report may issue corrected assessments.
fully depreciated and/or expensed property on the
Federal Income Tax Return, it should be reported on the AMENDED TAX RETURNS
Business Personal Property Return and is subject to
assessment. If the business owns any fully depreciated Amended Business Personal Property Tax Returns can be
and/or expensed personal property, and it is not reported filed to correct reporting errors or claim a missed exemption
in Section VII, please complete Form SD1. It may be (except for missed manufacturing exemptions) within 3 years
necessary to include a schedule that contains detailed of the April 15th date that the return was originally due.
description of the personal property, the original cost, Amended returns must be accompanied by information
and the year of acquisition. 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
C. If the business has disposed of or transferred assets in the REMARKS section, along with a brief explanation for
in to or out of Maryland during the prior year, please the amended personal property tax return. You may also
complete Form SD1 and provide the cost of the wish to provide additional detail for an amended return by
disposed/transferred property, the manner of disposal, making use of the Form SD1. Again, please verify that your
and to whom the property was transferred. Please entity name and Department ID number figure
provide sales agreements, settlement sheets or other prominently . Do not send $300 ﬁling fee with an amended
supporting documentation. tax return. Amended tax returns should be mailed to:
Maryland Dept. of Assessments and Taxation
TRANSFER OF PROPERTY Personal Property Division
301 W. Preston Street Baltimore,
If a business transfers, sells, or disposes of all personal Maryland 21201-2395
property on or after January 1, but before July 1, the
Department must be notified in writing on or before EXEMPTIONS
October
Personal Property Tax Exemptions provided by statute
1. The notification must contain an itemized description shall be strictly construed. Before an exemption can be
of the property involved, the date and manner of obtained, the taxpayer must show afﬁrmatively that the
transfer, the name(s) and address of the new owner(s) exemption is clearly allowed.
of the property, the consideration received, and a copy Businesses may ﬁle amended returns to correct reporting
of the sales agreement (if available). Upon proper errors or claim missed exemptions (except for missed
notification and compliance with Section 10- 402 of the manufacturing exemptions) within three years of the April
Tax Property Article, the assessment shall be 15th date that the return was originally due. The following
transferred to the new owner(s). See Form 21 as you are examples of two of the more common personal
may be required to complete and submit it to the property tax exemptions.
Department.
OUT OF BUSINESS Manufacturing and Research and Development, Tax

Form 1 Instructions 2020 Page 6 of 9

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Property Article § 7-225 Exemption applications may be emailed to
sdat.ppaudit@maryland.gov.
For manufacturing exemption requests, an application
must be submitted on or before September 1 of the In addition, State law requires that certain types of personal
assessment year in order to qualify for the current tax property be fully exempt throughout Maryland from any
year. Please see https://dat.maryland.gov for the assessment and taxation. These include aircraft, farming
Manufacturing and R&D Exemption Application. Section implements, residential (non-business) property, most
7-104 of the Tax-Property Article of the Annotated Code registered vehicles, boats not more than 100 feet in length,
of Maryland has been revised to include subsection (d) customized computer software, intangible personal property
that allows the owner of manufacturing personal property (e.g., stocks, bonds, patents, goodwill, trademarks, etc.).
to ﬁle an application within 6 months after the date of the Full or partial exemptions may apply depending on the
ﬁrst assessment notice for a taxable year that includes location of the property for: manufacturing/R&D machinery
the manufacturing personal property. If the application is and equipment, manufacturing/R&D inventory and
approved, the exemption shall be granted for the taxable commercial inventory. Visit the Department’s website for a
year. This exception to the September 1 deadline is complete listing of these exemptions.
applicable to taxable years beginning after June 30,
2009. No manufacturing exemption can be granted Tax Property Article § 7-245
unless a timely application is ﬁled. A person’s (any business entity’s) personal property is
not subject to valuation or to property tax if ALL of the
Once the exemption is granted to an entity, no additional person’s personal property statewide has a total original
manufacturing applications are required in subsequent cost less than $2500. This exemption shall take effect July
years. Manufacturing assets acquired after the 1, 2018, and shall be applicable to all taxable years
exemption is granted will need to be described as well beginning after December 31, 2018.
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 theManufacturing/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 anIRS 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.

Form 1 Instructions 2020 Page 7 of 9

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NOTES:                                                        DEPRECIATION RATE CHART  

Mail the completed return to:                                STANDARD DEPRECIATION RATE 
Maryland Department of Assessments and Taxation 
Business Personal Property                                   Category A: 10% per annum* 
PO Box 17052                                                 All property not specifically listed below. 
Baltimore, Maryland 21297-1052 
                                                             SPECIAL DEPRECIATION  RATES (The rates below apply only to 
All other correspondence, including Amended Returns,         the items specifically listed. Use Category A for other assets.) 
should be sent to: 
Maryland Dept. of Assessments and Taxation                   Category B: 20% per annum*  
Business Personal Property                                   Mainframe computers originally costing $500,000 or more. 
301 W. Preston Street 
Baltimore, Maryland  21201-2395                              Category C: 20% per annum* 
                                                             Autos (unlicensed), bowling alley equipment, brain scanners, car 
Form SD1 is a supplemental detail form and may not apply 
                                                             wash equipment, contractor's heavy equipment (tractors, 
to all entities. It may not be necessary for you to complete bulldozers), fax machines, hotel, motel, hospital and nursing home 
one. It may only be required under  certain circumstances    furniture and fixtures (room and lobby), MRI equipment, mobile 
such as the following:                                       telephones, model home furnishings, music boxes, outdoor 
          Disposals and transfers                            Christmas decorations, outdoor theatre equipment, photocopy  
          Expensed property                                  equipment, radio and T.V. transmitting equipment, rental pagers, 
          Exempt property/Exempt organizations               rental  soda fountain equipment, self-service laundry equipment,  
          Amended returns                                    stevedore equipment, theatre seats, trucks (unlicensed), vending 
                                                             machines, x-ray equipment.  
The form can be found online at 
https://dat.maryland.gov/Pages/sdatforms.aspx                Category D: 30% per annum** 
                                                             Data processing equipment, canned software.  

                                                             Category E: 331I3% per annum*  
                                                             Blinds, carpets, drapes, shades. The following applies to equipment  
HELPFUL LINKS                                                rental companies only: rental stereo and radio equipment, rental 
                                                             televisions, rental video cassette recorders and rental DVDs and 
SDAT ONLINE FORMS:                                           video tapes.  
https://dat.maryland.gov/Pages/sdatforms.aspx 
DEPARTMENT ID NUMBER  SEARCH:                                Category F: 50% per annum*  
https://egov.maryland.gov/BusinessExpress/EntitySearch       Pinball machines, rental tuxedos, rental uniforms, video games. 

REQUEST A PERSONAL PROPERTY EXTENSION:                       Category G: 5% per annum*  
http://pprextensions.dat.maryland.gov/                       Boats, ships, vessels, (over 100 feet). 

                                                             Long-lived assets  
FILE CURRENT & PRIOR YEARS PERSONAL                          Property determined by the Department to have an expected life in 
PROPERTY RETURNS ONLINE:  To use this system you             excess of 10 years at the time of acquisition shall be depreciated at  
must create an account                                       an annual rate as determined by the Department. 
https://egov.maryland.gov/BusinessExpress/Account/LogO 
n?ReturnUrl=%2fBusinessExpress%2fUserRegistration            * Subject to a minimum assessment of 25% of the original cost. 
                                                             ** Subject to a minimum assessment  of 10% of the original cost. 
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) 

       Form 1 Instructions 2020                                                                                    Page 8 of 9

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                                 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 2020                                                                               Page 9 of 9

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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 1stdeadline 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 2020 Page 10 of

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