Maryland requires most registered business entities to file a combined Annual Report and Business Personal Property Return (Form 1) with the Maryland State Department of Assessments and Taxation (SDAT). This report updates the state with current information about your entity and reports any tangible personal property your business owns or leases in Maryland. Maintaining this filing helps ensure your entity’s active status and good standing. In addition to this, there are annual income tax filings with the Maryland Comptroller of the Treasury and specific requirements for charitable organizations.
Why is it important to file? Maintaining good standing with the State of Maryland is crucial for your entity’s legal operation. Failure to comply with these filing requirements can lead to severe penalties and negative consequences, including:
Late Fees: If the Annual Report and Personal Property Return (Form 1) is not filed by the April 15th deadline (or by the extended deadline), specific financial penalties apply. The initial penalty is a percentage of the county assessment of your business personal property (minimum $30, maximum $500), plus an additional 2% of this initial penalty for every 30-day period it remains late.
Forfeiture of Charter: Persistent failure to file may lead to the forfeiture of your business charter. This means your domestic entity will be administratively dissolved or your foreign entity will have its authority revoked to transact business in Maryland.
Loss of Liability Protection: For LLCs and corporations, forfeiture can lead to the loss of personal liability protection for the owners and managers, potentially exposing personal assets to business debts and lawsuits.
Loss of Name Protection: Your entity’s name may become available for others to use.
Inability to Conduct Business: A forfeited status can hinder your ability to legally enter into contracts, maintain bank accounts, or defend yourself in Maryland courts.
Complex Reinstatement: Reinstatement is a time-consuming and often costly process, requiring the filing of all past due reports and payment of all accumulated fees and penalties.
Specific Requirements by Entity Type in Maryland:
For All Entity Types (LLC, Corporation, Non-Profit, Partnership) in Maryland:
Annual Report & Business Personal Property Return (Form 1) (Maryland SDAT):
Frequency: Annually.
Filing Period: Can generally be filed starting January 1st each year.
Due Date: By April 15th of each year. If April 15th falls on a weekend or holiday, the deadline is the next business day.
Extensions: A 60-day extension to file can be requested online through the SDAT website on or before the April 15th deadline.
Non-Stock (Non-Profit) Corporations: $0.00 (No Fee!), but still must file to maintain good standing.
Note: There may be a small convenience fee for online credit card payments.
Information Required: Entity’s legal name, SDAT Department ID number, current principal office mailing address, current Resident Agent information (name and street address), and information on the entity’s governing persons (e.g., officers/directors for corporations/non-profits; members/managers for LLCs; partners for partnerships). This form also requires reporting of tangible personal property located in Maryland (e.g., furniture, fixtures, equipment, machinery). Businesses with less than $20,000 in personal property can simply certify this on the form.
Filing Method: Primarily filed online through the Maryland Business Express portal (preferred for faster processing) or by mail.
For Corporations (For-Profit & Professional) in Maryland:
In addition to the Annual Report & Business Personal Property Return (Form 1):
Maryland Corporate Income Tax (Maryland Comptroller of the Treasury – Form 500):
Frequency: Annually.
Due Date: By the 15th day of the 4th month following the close of your taxable year (e.g., April 15th for calendar year filers).
No Corporate Franchise Tax: Maryland does not have a separate corporate franchise tax based on the privilege of doing business, but the Form 1 fee is often colloquially referred to as such.
Extensions: Maryland generally grants a 6-month extension to file if a federal extension is filed. This is an extension to FILE, not an extension to PAY; any tax due must still be paid by the original deadline to avoid penalties and interest.
For Limited Liability Companies (LLCs) in Maryland:
In addition to the Annual Report & Business Personal Property Return (Form 1):
Maryland Income Tax: LLCs are generally treated as pass-through entities for Maryland income tax purposes (unless they elect to be taxed as corporations).
Single-Member LLCs (Disregarded): Income and losses are reported on the owner’s individual Maryland income tax return (Form 502 for residents, Form 505 for nonresidents). No separate state-level return is typically filed by the LLC itself.
Multi-Member LLCs (Partnership-Taxed): If your LLC is a multi-member LLC taxed as a partnership, it generally needs to file Form 510, Pass-Through Entity Income Tax Return, with the Maryland Comptroller of the Treasury. This is an informational return. Nonresident member withholding or composite tax payment may apply.
Corporate-Taxed LLCs: If your LLC has elected to be taxed as a corporation for federal purposes, it will file Form 500 and be subject to Maryland corporate income tax.
For Partnerships (General Partnerships, Limited Partnerships, Limited Liability Partnerships, Limited Liability Limited Partnerships) in Maryland:
In addition to the Annual Report & Business Personal Property Return (Form 1) (for LPs, LLPs, LLLPs, and some GPs):
General Partnerships (GPs):
If a GP does not own or lease tangible personal property in Maryland or hold a trader’s license, it is not required to file Form 1.
However, all GPs that file a federal partnership return (Form 1065) and have Maryland source income must file a Maryland Partnership Return of Income.
Limited Partnerships (LPs), Limited Liability Partnerships (LLPs), Limited Liability Limited Partnerships (LLLPs): These entities must file Form 1, regardless of whether they own personal property, as it is also their annual registration.
Maryland Pass-Through Entity Income Tax Return (Maryland Comptroller of the Treasury – Form 510):
Frequency: Annually.
Due Date: By the 15th day of the 4th month following the close of the taxable year (e.g., April 15th for calendar year filers).
Note: This is generally an informational return. Partnerships are usually pass-through entities, and the partners pay tax on their share of the income. Nonresident partner withholding or composite tax payment may apply.
For Non-Profit Corporations in Maryland, please also note the following:
In addition to the Annual Report & Business Personal Property Return (Form 1):
Annual Report & Personal Property Return (Form 1) Filing Fee:$0.00 (No Fee!) for Non-Stock (Non-Profit) Corporations. However, the form must still be filed by April 15th to maintain good standing.
Charitable Organization Registration and Annual Renewal (Maryland Secretary of State – Charitable Organizations Division):
If your non-profit solicits charitable contributions in Maryland (unless specifically exempt, typically certain religious organizations or those receiving very low contributions and not using professional fundraisers), you must register and renew annually with the Maryland Secretary of State, Charitable Organizations Division.
Due Date: Annually, generally within 6 months of the end of the organization’s fiscal year (e.g., June 30th for a December 31st fiscal year-end). An extension of up to 3 months is available.
Filing Fee: Varies based on annual gross contributions (e.g., typically $50-$300 for registration/renewal, $0 for organizations receiving less than $25,000 and not using a professional solicitor).
Required Attachments: This renewal typically requires submitting a completed registration form and a copy of your federal IRS Form 990 series return. Audited or reviewed financial statements may be required for larger organizations based on contribution thresholds.
Penalties: Failure to comply can lead to fines, injunctions, or legal action for unlawful solicitation.
Maryland Exempt Organization Business Income Tax (Maryland Comptroller of the Treasury – Form 500 if applicable):
Frequency: Annually, if applicable.
Applies if: Your non-profit has unrelated business taxable income (UBTI) that exceeds the federal filing threshold. If so, a Maryland corporate income tax return (Form 500) would be filed to report and pay tax on UBTI.
No other state-level income tax: Generally, if your non-profit has obtained 501(c) tax-exempt status from the IRS, it is also exempt from Maryland corporate income tax purposes (unless it has UBTI).
Federal IRS Form 990 Series: As a federally tax-exempt organization, your non-profit must file an annual information return with the IRS (Form 990, 990-EZ, 990-PF, or 990-N, depending on your gross receipts and assets). This is typically due by the 15th day of the 5th month after your fiscal year ends (e.g., May 15th for a December 31st fiscal year-end).
What information is generally required for these filings? The various Maryland filings typically require verification or updating of the following:
Your entity’s legal name and Maryland SDAT ID number.
The current principal office mailing address.
The name and physical street address of your Maryland Resident Agent.
For Corporations and Non-Profits: Names and addresses of your principal officers and directors.
For LLCs: Names and addresses of managers (if manager-managed) or members (if member-managed).
For Partnerships (LPs, LLPs, LLLPs, and some GPs): Names and addresses of general partners or all partners.
Updated contact information for the entity.
Details on tangible personal property owned or leased in Maryland (if applicable).
For Non-Profits: Confirmation of your federal tax-exempt status and details regarding any charitable solicitation activities and financial information for charitable reporting.
How can we assist you? We understand that navigating these compliance requirements, particularly Maryland’s combined report and personal property tax components, can be complex. We are here to assist you with understanding and fulfilling your Maryland compliance obligations. Our services for these filings include:
Determining your specific filing requirements and due dates.
Gathering the necessary information, including personal property details.
Preparing and accurately filing your Annual Report & Business Personal Property Return (Form 1) with Maryland SDAT.
Assisting with the preparation and filing of your Maryland tax returns (e.g., corporate income tax, pass-through entity returns) (if applicable).
Preparing and filing any applicable non-profit charitable registrations.
Arranging payment of the applicable fees/taxes.
Confirming receipt and good standing with Maryland SDAT and, if applicable, the Comptroller of the Treasury or Secretary of State’s Charitable Organizations Division.
What we need from you: To facilitate these filings, fill up the information sheet:
Please do not hesitate to contact us at your earliest convenience to discuss your Maryland compliance obligations. We can help ensure your entity remains in good standing and avoids any potential adverse consequences.
