Understanding and Minimizing Maryland Personal Property Taxes | CFO Source
Maximizing Profits, Minimizing Taxes,
And Finding Capital For Our Clients

Understanding and Minimizing Maryland Personal Property Taxes

Each year Maryland business owners must pay a personal property tax on such assets as equipment, furniture and computers. The tax is calculated based on an assessed value multiplied by the applicable tax rate for the county in which the equipment is located. The rates can vary significantly, for example Baltimore City is the highest at 5.67% of assessed value while Worcester County property is taxed at 1.75%.

The assessed value of equipment is determined by applying the “depreciation” rates defined by the state for each category of property. The depreciation rates used for personal property tax assessments are completely separate and bear no resemblance to rates issued by the IRS for corporate income tax returns. There is no accelerated depreciation and assets reported are never depreciated to a zero value, hence as long as assets are reported a business will be assessed a tax.

Business must report to the state by April 15th of each year the original cost of personal property owned as of the end of the prior year broken out by location, asset category, and by year acquired. The state computes the assessment, forward this information to each county, which then generates a bill to businesses. Maryland businesses will receive two documents related to personal property taxes – 1) the assessment, which is not a bill, and 2) the actual tax bill. Failure to file the return and/or pay the tax will result in forfeiture of your corporate charter and denial of renewal of business licenses.

Here are ways to minimize this burden:

  • Remove from your books and the reporting any assets that you no longer own, or that have been replaced. Computers from 10 years ago need to be off your books and the report, as well as assets that have been scrapped.
  • Take any exemptions that are available – manufacturing assets are exempt, as well as customized computer software. Licensed motor vehicles are not subject to personal property tax, so make sure these are not reported as equipment.
  • Put assets in the correct categories – the deprecation rates are faster for certain categories, so make sure that assets with faster depreciation rates are properly categorized.
  • Where possible, locate assets in jurisdictions with lower tax rates. One firm we know moved its data center to a lower rated jurisdiction and saved about $4,000 annually.
  • Make sure assets that are out of state are reported as such as these will not be subject to the tax.

What Our Clients Say...

"We struggled for several years with high turnover in our bookkeeper position, which resulted in missed billings and duplicate payments. Craig Kershaw was able to locate a high caliber person who quickly took over the accounting and is now helping to expand the business into new markets. I no longer worry about whether my accounting is being done properly."

-Bryant Brambeck, Owner, Liberty Emblem Company

Does Your Company Need
CFO or Accounting Support?
  • This field is for validation purposes and should be left unchanged.

arrow Click to View the Areas That We Serve arrow

Regions Served

  • Frederick County: Frederick (21701, 20702, 21703, 21709), New Market (21774) , Mount Airy (21771), Urbana (21704), Ijamsville (21754), Walkersville (21793), Libertytown (21762), Damascus (20872), and more.

    Howard County: Clarksville (21029), Columbia (21044), Cooksville (21723), Dorsey (21075), Elkridge (21075), Ellicott City (21043), Fulton (20759), Glenelg (21737), Glenwood (21738), Granite (21163), Hanover (21076), Highland (20777), Jessup (20794), Lisbon (21765), Marriottsville (21104), North Laurel (20723), West Friendship (21794), Woodbine (21797), Woodstock (21163), and more.

    Montgomery County: Olney (20832), Damascus (20872), Laytonsville (20882), Silver Spring (20910), Clarksburg (20871), Gaithersburg (20878), Germantown (20876), Bethesda (20816), Chevy Chase (20815), and more.

    Baltimore County: Arbutus (21227), Catonsville (21228, 21250), Cockeysville (21030, 21031, 21065), Dundalk (21222), Edgemere (21219), Essex (21221), Garrison (21055), Lansdowne (21227), Lochearn (21207), Lutherville (21093), Middle River (21220), Milford Mill (21244), Overlea (21236), Owings Mills (21117), Parkville (21234), Park Heights (21215), Pikesville (21208), Randallstown (21133), Reisterstown (21136), Rosedale (21237), Timonium (21093), Towson (21204), White Marsh (21162), Woodlawn (21207), and more.

    Carroll County: Eldersburg (21784), Finksburg (21048), Hampstead (21074), Manchester (21102), Marriottsville (21104), Taneytown (21787), Union Bridge (21791), Westminster (21157, 21158), Mount Airy (21771), New Windsor (21776), Sykesville (21784), Woodbine (21797), Taneytown (21787), and more.

  • Washington, DC and Northern Virginia

cbs radio



facebook twitter linked in google plus

Contact CFO Source

5515 Hudson Drive
Sykesville, MD 21784
phone icon 443-487-7733 | Fax: (206)415-2361

certified advisor