Tax Cybrary

Property Tax Rapid Reference - MARYLAND

Name Of Tax:   Property Tax

Imposed By:  
Property Tax Article of the Annotated Code of Maryland, 1981, as amended.

Reports:
Returns are not required for real property. Each taxpayer having tangible personal property in the state of Maryland must file a property tax return with the State Department of Assessments and Taxation by April 15 each year giving the cost by year of acquisition of each category of property for counties and incorporated cities, towns and special taxing districts as of the January 1 date of finality. Domestic and foreign corporations must report their personal property on Form 1. The returns of corporations authorized to issue capital stock must submit a $100 filing fee ($300, effective 1/1/04) and a copy of their latest available balance sheet with the tax return.

Payments:
The Maryland Department of Assessments and Taxation assesses all property for purposes of state, county and city taxation and apportions the assessment appropriately among them. Each political subdivision sends a tax bill to the taxpayer for payment. All payments are due on July 1 of the assessment year and become delinquent on September 30. Effective 7/1/84, the state tax rate on personal property was set at zero. Effective 7/1/00, all personal property is exempt from the state property tax.

Administration:
The State Department of Assessments and Taxation is responsible for establishing all assessments and advising each county and incorporated city or town of the assessment established for each taxpayer in its jurisdiction. Each county and incorporated city or town will administer the billing and collection of the tax from each taxpayer within its jurisdiction. The county tax collector is agent for the state comptroller and collects both county and state property tax.

Subject To Tax: All real and personal property located within the State of Maryland is taxable unless specifically exempted by statute.

Address:
State Department of Assessment and Taxation
301 West Preston Street
Baltimore, MD 21201

Telephone:
(410) 767-1199 (Real Estate)
(410) 767-1199 Wilton P. Stansburg (State Supervisor)
(410) 767-1150 Edward Muth (Personal Property)

Web Site:
http://www.dat.state.md.us/index.html

Record Retention:
The taxpayer should retain adequate records for four (4) years and make them available to the State should it request them to confirm the accuracy of values reported on his property tax report.

Statute Of Limitations:
No assessment of property may be made beyond a period of four (4) years from the due date. Any action taken within the four (4) year period may be pursued beyond the limitation period. The period for collection of taxes billed is seven (7) years from the date the tax is imposed.

Appeals And Protests:
The taxpayer must file a written request for a hearing with the Maryland Dept. of Assessment and Taxation within 45 days of the issuance of a notice of tentative assessment or the assessment will become final. When an assessment appeal is filed with a supervisor and the amount of the proposed value of the property is more than $2,000,000, the Dept. of Assessments and Taxation must notify the appropriate county legal officer of the filing. After the hearing the department will issue a final assessment. For the assessment made by the Supervisors of Assessments, appeal lies to the property tax assessment appeal board where the property is located. Any appeals filed with a property tax assessment appeal board in which the value of property is at issue on or after 7/1/89, requires that the Department of Assessments and Taxation and the taxpayer exchange any written appraisals to be used for the purpose of placing a value on the property at least ten days before a hearing on the appeal. 

If, after a hearing, the taxpayer disagrees with the final assessment issued, an appeal of the assessment can be filed with the Maryland Tax Court within 30 days of the issuance of the final notice by the Dept. On any appeal to the Maryland Tax Court, the Department and the taxpayer must exchange any written appraisals to be used for the purpose of placing a value on the property in question at least 10 days before the hearing. The decision of the Tax Court may be further appealed by applying for a review by the Circuit Court of the County in which the property is located or in the Baltimore City Court. Appeals may be taken to the Court of Special Appeals if dissatisfied with the final judgement of Circuit Court. Appeals to the Court of Special Appeals must be filed within 30 days of the issuance of the Circuit Court final judgement. Personal property appeals bypass the property tax appeal board and go directly to Maryland Tax Court.

Refund Procedures:
Illegal Tax - The taxpayer must pay tax under protest and go through the appeals process to obtain a refund.

Clerical Error - The taxpayer must file a claim with the governing body on or before three years from the date that the property tax is paid. Criteria include: Filing on a form prescribed by the governing body, Supporting documentation for refund, Filing under oath.

Tax Incentive Exemption:
The Maryland Property Tax Law authorizes Baltimore City or the governing body of any county or municipality to pass an ordinance or resolution either wholly or partially granting a tax credit for county and/or municipal (state tax not affected) property taxation, for a period to be determined by the governing body, property of any manufacturing, fabricating or assembling facility that locates in the county or municipality, expands therein or develops a new product or industrial process. Each governing body that grants this exemption must submit a copy of the ordinance or resolution to the State Department of Assessments and Taxation.

Commencing with the taxable years beginning after 6/30/97, for the purpose of the exemption for manufacturing property, the term "manufacturing" is redefined to mean the process of substantially transforming or a substantial step in the process of substantially transforming tangible personal property into a new and different article of tangible personal property by use of labor or machinery.

Also commencing with taxable years beginning after 6/30/97, a county, municipal corporation, or Baltimore City may provide a credit against local property tax for up to 100% of the tax imposed on the real property of a manufacturing, fabricating, or assembly facility or a research and development facility.

Any political subdivision of the state may apply to the Secretary of Economic and Community Development to have an area declared as an enterprise zone. Any county applying to the Secretary on behalf of a municipality must have the consent of the municipality in which the enterprise zone is located. If the area meets the requirements to qualify as an enterprise zone and is so designated by the Secretary, qualified real property in the zone used in a trade or business by a business entity is entitled to an exemption from property taxation for a period of not more than ten (10) years beginning with the taxable year following the calendar year in which the real property initially becomes qualified property. This exemption is in the form of a credit and does not apply to state property tax.

The appropriate governing body calculates the amount of the tax credit equal to a percentage of the amount of property tax imposed on the eligible assessment of the qualified property as follows:

The State Department of Assessments and Taxation has also issued a chart of exemptions for commercial inventory, manufacturing inventory and manufacturing machinery for the 1995-96 tax year by state, county and municipality expressed as a percentage exempt from assessment. A copy of this chart immediately follows for the convenience of the reader.

Commencing with tax years beginning after 6/30/97, federal, state, county, or municipal corporation government property leased to a person who will use the property in connection with a for-profit business is not subject to Maryland property tax if the property is used exclusively for heating, cooling, or generating and distributing electricity for property owned and occupied by the state and if the property was not subject to property tax for the tax year beginning 7/1/96.

Effective 10/1/97, credits are available against the county and municipal corporation property tax imposed on real property owned or leased by a qualifying business entity in Maryland and on certain personal property owned by such entity. To qualify for the tax credit against the tax on real property owned or leased by a business entity, such a business must (1) construct or expand, by at least 5,000 square feet, the premises on which it conducts its business, either by purchasing or constructing a new premises or by leasing a new premises, and (2) employ at least 25 individuals (10 individuals for businesses in counties with populations of less than 30,000) in new, permanent, full-time positions in the new or expanded premises. To qualify for a credit against personal property, a business entity must certify that the personal property is located on the new or expanded premises that qualifies for the above-noted credit against real property taxes. The credit that may be claimed against the tax imposed on the assessed value of the new or expanded premises is (1) 52% in the first and second taxable years; (2) 39% in the third and fourth taxable years; (3) 26% in the fifth and sixth taxable years.

For tax years beginning after 12/31/97 but before 1/1/08, the credit against Maryland local taxes on real and personal property for businesses that expand and create new jobs has been extended two years and will automatically expire 1/1/03. Any excess tax credits may generally be carried forward and applied as a credit for tax years beginning after 12/31/07. As an additional requirement to qualify for the credit, a business’s new or expanded premises must be located in a priority funding area. A priority funding area includes an incorporated municipality, a designated neighborhood, an enterprise zone, those areas of the state located between interstate 495 and the District of Columbia, and those areas located between interstate 685 and Baltimore City.

An enhanced real and personal property tax credit is available to qualified businesses that (1) obtain at least 250,000 square feet of new or expanded premises; (2) continue to employ at least 2,500 individuals in existing, permanent full-time positions paying at least 150% of the federal minimum wage at premises in the state; and (3) employ at least 500 individuals in new permanent full-time positions paying at least 150% of the federal minimum wage at new or expanded premises. A business may also qualify for the credit by (1) obtaining at least 250,000 square feet of new or expanded premises and (2) employing at least 1,250 individuals in new permanent full-time positions paying at least 150% of the federal minimum wage at new or expanded premises and, if applicable, in newly-renovated premises adjoining or neighboring the new or expanded enterprise.

The business must meet these requirements within six years of notifying the appropriate county or municipality of its intention to claim the credit. The business must be primarily engaged in one or more of the following at the qualifying premises: (1) manufacturing or mining; (2) transportation or communications; (3) agriculture, forestry, or fishing; (4) research, development, or testing; (5) biotechnology; (6) computer programming, data processing, or other computer-related services; (7) central financial, real estate, or insurance services; (8) operation of central administrative offices or a company headquarters; (9) public utility source; (10) warehousing; (11) business services.

The business may claim for each of the first 12 taxable years after qualification a credit against its real and personal property tax in an amount equal to 58.5% of the amount of tax imposed on the increase in assessment of (1) the new or expanded premises, (2) newly renovated real property improvements adjoining or neighboring the new or expanded premises, and (3) the personal property located on the premises.

Depreciation And Assigned Lives Of Tangible Personal Property:
The Maryland Property Tax Law requires the filing of a personal property tax return with the State Department of Assessments and Taxation. Based on the return, the Department determines the assessment for each county and municipality. A copy of the return for domestic and foreign corporations immediately follows and page 4 of the return shows the depreciation rate chart giving the annual rate of depreciation for each category of tangible personal property.

Effective 11/13/96 for the 1997 tax year, businesses are able to depreciate computers at a faster rate for most computer hardware and software for personal property tax purposes. The new schedule will be based upon a three-year life. Prior to 1997, the schedule was based upon a five-year life. The percent good is as follows:

1st year – 70%
2nd year – 40%
3rd year – 10%
Residual – 10%  

Return to the state selection page of the Rapid Reference

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