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Form 2 Instructions                                                                                                  SDAT Business Personal Property  

                     INSTRUCTIONS FOR 2023 FORM 2  

SOLE PROPRIETORSHIP AND GENERAL PARTNERSHIPS 
                   Business Personal Property Tax Return 
                       General Information  and Requirements  

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

1) WHO MUST FILE A RETURN 
A Maryland personal property return (Form2) must be filed by all sole proprietorships and general              partnerships if they possess (own,      lease, 
rent, use or borrow) business personal property         or need   a business license. A business which fails to file this return   will likely receive an 
estimated assessment. 
Limited partnerships, limited liability    companies and limited liability partnerships that  are registered     with the Department's Charter 
Division are required   tofile a Form 1. 

2) WHEN AND WHERE TO FILE 
At the beginning of each year, the Department       makes the business personal property      return available     on its  website.   It is the responsibility 
of the entity   to obtain and file the return on time. The   due date for filing is April 15, of filing  year. 
Should April 15 fall on a weekend, the return will be due on the Monday immediately following.             The due   date for the     2023 return is April 
17,  2023. 

         The Department encourages all customers to file through the online           portal, Maryland Business Express      (MBE) at 
         https://egov.maryland.gov/BusinessExpress/  

         If mailing your return please send to Department of Assessments and Taxation, Personal Property Division,                 P.O.  Box 17052, 
         Baltimore, MD 21297- 1052. 

         Amended returns or second filings       are   to be sent to the Department   of Assessments and Taxation, Personal Property            Division, 
         301 W. Preston Street, Baltimore,       MD 21201-2395. 

3) EXTENSION OF TIME TO FILE 
The Department may grant a 60 day extension        to file the return. The due date     on extension will be June 16, 2023. 
All preparers and taxpayers with Internet        access should  use the Department's        website   to ensure prompt and accurate      recording of an 
unlimited number of requests free of charge        . You   will receive   a confirmation    number and   a printed list as proof   of your submission. Always 
print and keep a copy   of the confirmation page. The Department will automatically         accept it as evidence    of a valid approved    extension  in 
case there is ever   a problem. 

You may request   a60 day extension of the       filing deadline, at   no cost, by visiting http://pprextensions.dat.maryland.gov/ Extension 
requests must be made on   or before       April 15th. 
Increased use of this site is anticipated as  April 15th approaches so the Department suggests you apply for extensions as soon 
as the site opens in December. 
Please note that Department of Assessments and Taxation             does not accept paper extensions. No additional extension to file       will be 
allowed after the 2 months. Extensions approved by the Internal Revenue Service   or Maryland Comptroller               of the Treasury for 
income tax returns will not be accepted. 

4) FORMS 
To ensure proper posting to your account always         provide the    business name and    your Department     ID number. Please     use this 
number in   allcommunications with the     Department. 

5) MAILING ADDRESS  CHANGES 
Make necessary address corrections on the form and check the address correction             box  on page 1 of    the return. 

            Instructions for 2023 Form 2                                                    Revised January 2023   https://dat.maryland.gov 

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Form 2 Instructions                                                                                                    SDAT Business Personal Property  

6)  LATE FILING PENALTIES 
A business which files an annual return postmarked after the due date   of April          17 of filing year (or June  16   if an extension is 
approved) will receive an initial penalty of 1/10   of one percent     of the county assessment, plus interest at the         rate of two percent  of 
the initial penalty amount for each thirty (30) days   or part thereof that the      return   is late. If returns are filed late, you cannot pre-pay 
penalties at time of filing return. They  will be assessed   at a later date. 

7)  PERIOD  COVERED 
All returns shall cover the calendar year regardless of any fiscal year. All   information required in this return shall         be given as of 
January 1, except line items 2 and 4, which refer to the twelve calendar       months   of prior    year). There    may be times    when 
supporting detail should be provided with the return. Please seeForm SD1, Supplemental Details. 
Information supplied on the return and enclosures are not open   to public inspection 

8)  WHAT MUST BE  REPORTED 
Generally all tangible personal property owned, leased, consigned or used by the business and               located within the 
State   ofMaryland on January 1, with     an original cost of   $20000 or more must  be reported.      (TP Article §   7-245 of the Annotated  Code   of 
Maryland). Property not in use must still be reported. All fully depreciated and expensed personal property must                  also be reported. 
Personal property includes but is not limited to office and plant furniture, machinery, equipment, tools, furnishings,              inventory,  and all 
other property not considered part of the real estate. 

Personal property   inthis State (other than operating     property of   railroads and public utilities)  falls into two subclasses:    
          Stock in businessor inventory--goods held by a taxpayer for sale and goods placed on consignment to another for sale in the 
          expectation of a quick turnover. Stock in business does      not include   goods manufactured by the taxpayer but held by           the taxpayer 
          for purposes other than sale or goods manufactured        by the taxpayer but placed in         possession  and control   of another as in the case 
          of leased property. Stock in business is assessed   at cost or market value     whichever is lower.       LIFO method   of valuation  is prohibited. 

          All other personal property includes all personal property other than inventory and is assessed at full cash value. Taxpayers shall 
          report such property which has been acquired by purchase at         cost in the year of acquisition. Taxpayers shall report such property 
          which has been acquired other than by purchase (including property manufactured by the                  taxpayer) at what    the property would 
          have sold for in the year of acquisition. To assess "all  other personal       property" the    Department generally applies a 10% rate     of 
          depreciation per annum to the reported property.        Exceptions to      the 10% rate can be found on the Depreciation Rate Chart. 
          Normally, property will not be depreciated below 10% of the original            cost. 
All questions must be answered in full. If the reporting taxpayer does        not    own the class of  property covered by any question,      the  word 
"none" or the figure"O” should be written   in the appropriate blank space. Estimated assessments may be                 issued   when questions remain 
unanswered or the answers are incomplete, evasive or unclear. Real property   is not             to be reported on   the return. 

9)  EXEMPTIONS 
Property tax exemptions provided   by statute shall be strictly construed. Before         an exemption can be       obtained  the taxpayer must    show 
affirmatively that the exemption is clearly allowed. 

Businesses may file amended returns to correct reporting errors or claim missed exemptions (except for missed manufacturing 
exemptions) within three years of the April 15 date that the return was        originally due. 

For manufacturing exemption requests, an application must be submitted on or before September 1,   of the                   initial assessment year 
or within 6 months after the date   of the first assessment notice for     the taxable year that    includes the manufacturing personal 
property in order to qualify for the current tax year. Section 7-104 of the          Tax- Property Article   of the Annotated Code     of Maryland 
has been revised to include the following subsection (d) that allows the owner   of manufacturing personal              property to file  an 
application within 6 months after the date of the first assessment notice       for   a taxable year that includes     the  manufacturing personal 
property. If the application is approved, the exemption shall     be granted for     the  taxable   year. The   exception to  the September   1 
deadline   isapplicable to taxable years beginning    after June 30, 2009. No  manufacturing        exemption can be granted       unless a timely  
application is filed. As long as there are no  changes in the   operation, and the   exemption granted,         no additional manufacturing 
applications are required in subsequent years.    However, new acquisitions should always have a description of               the property    and 
explanation for its  use in the approved exempt operation.      SDAT also maintains the right to          audit such exemptions. 
Exemption applications can be found on the website, https://dat.maryland.gov/businesses/Pages/Business- Personal-Property.aspx 
and submitted via email tosdat.ppaudit@maryland.gov 

             Instructions for 2023 Form 2                                                    Revised January 2023     https://dat.maryland.gov

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Form 2 Instructions SDAT Business Personal Property

In addition, state law requires that certain types of personal property be fully exempt throughout Maryland from any assessment
and taxation. These include aircraft, farming implements, residential (non-business) property, most registered vehicles, boats not
more than 100 feet in length, customized computer software, intangible personal property (e.g., stocks, bonds, patents, goodwill,
trademarks, etc.).

Businesses owning exempt personal property described above should report the total cost of that property onForm SD1,
Supporting Detail .

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 or license.

Full or partial exemptions may apply depending on the location of the property for: manufacturing/R&D machinery and
equipment, manufacturing/R&D inventory and commercial inventory. These exemptions can be found on the Department's
website, dat.maryland.gov for a complete listing of these exemptions.

Low Assessments Tax Property Article § 7-245: A person's personal property is not subject to valuation or to property tax if all of
the person's personal property statewide had a
total original cost, including inventory and excluding licensed vehicles, is less than $20,000. The checkbox on the return must be
checked indicating the ownership of less than $20000 and be signed by the owner of the business. The Form 2 must be filed every
year with this attestation in order for a business to receive this exemption .

This exemption shall take effect July 1, 2022 and shall be
applicable to all taxable years beginning after December 31,
2021.

ROUNDING
Round cents to the nearest whole dollar. Fifty cents and above should be rounded to the next highest dollar.

10) AUDIT OF RETURN
All personal property assessments, and any information and figures reported on the personal property return, accompanying schedules and
related documents are subject to audit. As a result of such audits, the Department may issue corrected assessments.

11) TRANSFER OF PROPERTY
If a business transfers, sells, or disposes of all personal property on or after January 1, and before July 1, it must notify the Department in
writing on or before October 1, of the applicable assessment year. The notification must contain an itemized description of the property
involved, the date and manner of transfer and name(s) and address of the new owner(s) of the property, the consideration received, and a
copy of the sales agreement (if available). Upon proper notification and compliance with Section 10-402 of the Tax Property Article, the
assessment shall be transferred to the new owner(s). See Form 21.

12) OUT OF BUSINESS
If a business discontinues operations or goes "out of business" prior to January 1 of filing year, a return or letter of explanation detailing the
date the business ceased operations and what happened to the property must be filed. Failure to provide this information will result in an
estimated assessment being made against the business.

13) AMENDED RETURNS
Amended returns can be filed to correct reporting errors or claim a missed exemption (except for missed manufacturing exemptions see
item 9) within 3 years of the April 15 date that the return was originally filed.
Amended returns must be accompanied by information explaining why the amended return is being filed and reconciling the differences
with the original return. Write the word "AMENDED" across the top of page 1 of the return.

Instructions for 2023 Form 2 Revised January 2023 https://dat.maryland.gov

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Form 2 Instructions SDAT Business Personal Property

14) TRADER’S LICENSE
Sometimes businesses requiring atrader's license experience problems in obtaining one. Most of these problems are the result of one or
more of the following five situations:

1) Failure to file a personal property return (previous year).
2) Failure to report commercial inventory on the personal property return (previous year).
3) Unpaid personal property taxes (previous year).
4) Unpaid late filing penalty owed toSDAT.
5) Failure toregister with SDAT.
6) " If you are unsure of whether this applies to you, please contact your county's Clerk of the Court
at https://www.courts.state.md.us/pia/clerks . Maryland Annotated Code, Business Regulation Article §17-1808 allows counties and
municipalities toadopt a Uniform Trader's License Fee ."

SPECIFIC INSTRUCTIONS FOR FORM 2
SOLE PROPRIETORSHIP AND GENERAL PARTNERSHIPS

SECTION I

1. Check one: Sole Proprietorship (one owner) or General Partnership (two or more owners)
2. Provide the name of owner or owners.
3. Provide the complete mailing address for the business. If this is a new mailing address, check the box to the left.
4. Provide the SDAT Department ID number. To obtain the Department ID, go to Maryland Business Express,
http://egov.maryland.gov/BusinessExpress/EntitySearch The ID number is necessary to ensure proper credit to the account.
5. List federal employee ID# (FEIN).
6. List federal principal business code. It can be found on IRS Schedule C or Form 1065.
7. Provide the nature of business activity in Maryland (e.g., restaurant, legal services, construction, etc.)
8. Total gross sales must include sales in Maryland and sales by the Maryland location to out of state purchasers as well as transfers from
the Maryland location of the reporting business to out of state locations.

SECTION II

A. Please provide the actual physical location of all personal property in Maryland. P.O. Boxes are not acceptable. Indicate if this is a
change of location.
B. If you answered nature ofbusiness in Section I, then answer this question.
C. Indicate the fiscal year of the business and indicate the beginning and ending of that business year.
D. Answer yes if the business owns, leases, or uses personal property located in Maryland.
E. Indicate whether thetotal original cost of all the property, including inventory and excluding licensed vehicles, is less
than $20,000. If yes, you may proceed to the signature line.
F. Does the business own or use any property that is fully depreciated and/or expensed? If yes, is it reported on this return? If the
business owns or uses this type of property but does not report it on the return, please comment in remarks section.
G. If the business indicates the disposal or transfer of assets in and out of Maryland during the prior year, please comment in the
Remarks section and complete the Form SD-1, Supplemental Details.

SECTION III LINE ITEM 1
1. Furniture, fixtures, tools, machinery, and equipment not used for manufacturing or research and development. Includes but is not
limited to office furniture, fixtures and equipment, factory equipment and machinery, shelves,signs, counters, etc.

This form allows detailed reporting of property which falls under the different rates of depreciation. All property is to be reported under
Category A unless specifically listed in another category.

Instructions for 2023 Form 2 Revised January 2023 https://dat.maryland.gov

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Form 2 Instructions SDAT Business Personal Property

Refer to the Depreciation Rate Chart to determine where property owned by the business should be reported (see sample below).
Property reported in columns B through G requires a detailed description (e.g., Column C - Vending Machines, Copiers, etc.). Failure to
provide the required detail will result in the reported property being assessed at 10% rate of depreciation.

This property shall be reported at original cost in the year of acquisition without deduction of depreciation, investment credit or trade-in
of previously owned property. Include all fully depreciated personal property and property expensed under IRS Rules.

EXAMPLE
Property reported on this line item should be placed under the proper depreciation rate column by the year of acquisition. An example of
the correct method of filling out this section is provided for reference. Property reported in categories B through G require an explanation
on the lines provided below the box. If additional space is needed to show the necessary detail, attach a supplemental schedule.

ORIGINAL COST BY YEAR OF ACQUISITION
SPECIAL DEPRECIATION RATES B-G (See TOTAL
chart) COST
A B C D E F G
2014
2013 1150 12800 13,750
2012 3104 8400 11,504
2011 1500 5261 6,761
2010
2009 2500 2,500
2008 9127 500 9,627
2007 &
prior
Totals 14881 3000 5261 21200 44,142

Describe property identified in B -G above: Category D2011 PersonalComputer;CategoryE-2012,2013 RentalDVDs andVideo Tapes, 2008 Vending Machine; Category C
- 2009 Copier $2,000, Fax $500

LINE ITEM 2

Commercial Inventory is merchandise and stock in trade available for sale. This includes manufactured products sold at retail by the
manufacturer. An average of twelve (12) monthly inventories should be reported including two (2) physical inventories. Book
inventories may be used for months when physical inventories were not taken. Values are to be reported at cost or market value. The
LIFO method is prohibited in computing values. If there are multiple locations of inventory in Maryland they must be reported by each
location. Businesses may need a Trader's License.
" If you are unsure of whether this applies to you, please contact your county's Clerk of the Court
at https://www.courts.state.md.us/pia/clerks . Maryland Annotated Code, Business Regulation Article §17-1808 allows
counties and municipalities to adopt a Uniform Trader's License Fee ."

Rental equipment including but not limited to video tapes, stereos, televisions, tools, appliances and furniture is not considered
commercial inventory. These assets must be reported in Part B item.

Leased property and off rent equipment are not considered commercial inventory and should be reported on a separate schedule
showing the names and addresses of lessees, lease numbers, description of property, installation date and original cost by year of
acquisition for each location. Schedule should group leases by county where the property is located.

LINE ITEM 3
Supplies.Supplies are consumable items not held for sale (e.g., contractor's supplies, office supplies, etc.). Report the average cost.

Instructions for 2023 Form 2 Revised January 2023 https://dat.maryland.gov

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Form 2 Instructions SDAT Business Personal Property

LINE ITEM 4
Manufacturing/R&D Inventory is raw materials, supplies, goods in process and finished products used in and resulting from
manufacturing by the business. Include manufactured products sold at retail by the manufacturer under line item, commercial
inventory. An average of twelve (12) monthly inventories should be reported including two (2) physical inventories. Book
inventories may be used for months when physical inventories were not taken. Values are to be reported at cost or market value.
The LIFO method is prohibited in computing values. If there are multiple locations of inventory in Maryland they must be reported
by each location.

LINE ITEM 5
Tools, machinery and equipment used for manufacturing or research and development . Answer this question in detail even though such
property may by law or resolution be exempt. Reporting property on this line item is not a substitute for a manufacturing application. If
exemption is claimed for the first time, a manufacturing/research & development exemption application must be submittedon beforeor
September 1 of filing year before the exemption can be granted, or within 6 months after the date of the first assessment notice for the
taxable year that includes the manufacturing personal property in order to qualify for the current tax year. Section 7-104 of the Tax-
Property Article of the Annotated Code of Maryland has been revised to include subsection (d) that allows the owner of manufacturing
personal property to file an application within 6 months after the date of the first assessment notice for a taxable year that includes the
manufacturing personal property. If the application is approved, the exemption shall be granted for the taxable year. The exception to the
September 1 deadline is applicable to taxable years beginning after June 30, 2009. No manufacturing exemption can be granted unless a
timely application is filed. As long as there are no changes to the operation or to the entity, applications may not be required in
subsequent years. Contact the Department or visit our web site at www.dat.maryland.gov to obtain an application. This property shall be
reported at original cost in the year of acquisition without deduction of depreciation, investment credit or trade-in of previously owned
property. Include all fully depreciated personal property and property expensed under IRS rules.

For manufacturing the primary test for exemption requires substantially transforming, or a substantial step in the process of substantially
transforming tangible personal property into a new and different article by use of labor or machinery. The term manufacturing does not
include products mainly intellectual, artistic or clerical in nature, services, public utility services, or property used primarily in
administration, management, sales, storage, shipping, receiving or any other non-manufacturing activity.

Research and development means basic and applied research in the sciences and engineering, and the design, development and
governmentally required pre-market testing of prototypes, products, and processes. Research and development activities are exempt
whether or not the company has a product for sale.

The following activities do not constitute research and development: market research; research in social sciences, psychology, or other
nontechnical activities; routine product testing; service activities; sales; or research and development of a public utility.

6. Vehicles: Itemize motor vehicles with Interchangeable Registrations and vehicles that are unregistered (unlicensed). Vehicles registered
in Maryland and classified A-P are exempt
and should not be reported on the Personal Property Tax return. Vehicles registered outside Maryland may also be exempt. Exempt
vehicles include those registered in another taxing jurisdiction and of a classification (A-P) described in Title 13, Subtitle 9, Part II of
the Maryland Transportation Article.

Interchangeable Registrations include: dealer plates (Class 1A, 1B, 1C); recycler plates (Class 2); finance company plates (Class 3);
special mobile equipment plates (Class 4); and transporter plates (Class 5).
This property shall be reported at original cost in the year of acquisition without deduction or depreciation, investment credit, or
trade-in of previously owned property. Include all fully depreciated personal property and property expensed under IRS rules.

Motor vehicles with Interchangeable Registrations and unregistered/unlicensed vehicles are not exempt and will be assessed as
Category C property at 20% depreciation per annum (subject to a minimum assessment of 10% of the original cost).

7. Non-farming Livestock: Report book value and market value.

8. Other Tangible Personal Property: Include other tangible personal property not reported elsewhere on this return. Report total
cost on the return and supply a separate schedule including a description, the original acquisition cost, and the date of acquisition
of the property. Please see additional instruction under Other Personal Property Assessment Exemptions.

Instructions for 2023 Form 2 Revised January 2023 https://dat.maryland.gov

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Form 2 Instructions SDAT Business Personal Property

9. Property Owned by Others and Used or Held by the Business: All property that is not owned by the businessbut is held by the
business as lessee, on consignment, or otherwise must be reported.
File separate schedule showing names and addresses of owners, lease number, description of property, installation date and
separate cost in each cost.

10. Property Owned by the Business and Used or Held by Others: All property that is owned by the business but is held by others
as consignee, lessee or otherwise must be reported.
All leased property must be reported, including manufacturing equipment, and property leased to taxexempt organizations.
Manufacturer lessors shall report property which has been acquired other than by purchase at the retail selling price in the year
the property was manufactured (including property manufactured by a business for its own use). Manufacturing lessors may not
report this property using the cost of manufacture.

A separate schedule showing the names and addresses of lessees, lease numbers, description of property, installation date and original cost
by year of acquisition for each location must be supplied. Provide the physical street address of lessees. Post Office Box numbers are not
acceptable.

Excel schedules of leasing data may be submitted. Verify that the entity name and ID number are prominent on the schedule.
Schedule may be filed electronically and submitted to sdat.persprop@maryland.gov

SIGNATURE AND DATE
The return must be signed by an owner or partner. This signature must be an original not a copy. The date should reflect the date
the return was signed by the owner or partner and sent to the Department. Please include requested phone number and E-mail
address to assist us in resolving potential discrepancies.

Instructions for 2023 Form 2 Revised January 2023 https://dat.maryland.gov

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Form 2 Instructions SDAT Business Personal Property

DEPRECIATION RATE CHART

STANDARD DEPRECIATION RATE

Category A: 10% per annum*
All property not specifically listed below.

SPECIAL DEPRECIATION RATES (The rates below apply only to the items specifically listed. Use Category A for other assets.)

Category B: 20% per annum*
Mainframe computers originally costing $500,000 or more.

Category C: 20% per annum*
Autos (unlicensed), bowling alley equipment, brain scanners, car wash equipment, contractor's heavy equipment (tractors,
bulldozers), fax machines, hotel, motel, hospital and nursing home furniture and fixtures (room and lobby), MRI equipment,
mobile telephones, model home furnishings, music boxes, outdoor Christmas decorations, outdoor theatre equipment,
photocopy equipment, radio and T.V. transmitting equipment, rental pagers, rental soda fountain equipment, self-service
laundry equipment, stevedore equipment, theatre seats, trucks (unlicensed), vending machines, x-ray equipment.

Category D: 30% per annum**
Data processing equipment and other computer based equipment, canned software.

Category E: 331I3% per annum*
Blinds, carpets, drapes, shades. The following applies to equipment rental companies only: rental stereo and radio
equipment, rental televisions, rental video cassette recorders and rental DVDs and video tapes.

Category F: 50% per annum*
Pinball machines, rental tuxedos, rental uniforms, video games.

Category G: 5% per annum***
Boats, ships, vessels, (over 100 feet).

Long-lived assets
Property determined by the Department to have an expected life in excess of 10 years at the time of acquisition shall be
depreciated at an annual rate as determined by the Department.

* Subject to a minimum assessment of 10% of the original cost.
** Subject to a minimum assessment of 5% of the original cost.
*** Subject to a minimum assessment of 25% of the original cost.

Instructions for 2023 Form 2 Revised January 2023 https://dat.maryland.gov
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