How to File a Maryland Annual Report

What is an annual report?

An annual report is a document that businesses submit to the state (typically the Secretary of State or the state tax agency) in which they are registered and/or conduct business. States require annual reports as a way to view the financial activities of companies, keep tabs on their financial status, and update key business details.

In Maryland specifically, every legal entity must submit an annual report to the Maryland State Department of Assessments and Taxes. Corporations, LLCs, limited partnerships, business trusts, and real estate investment trusts file the document titled Form 1 Annual Report and Business Personal Property Return.

Form 1 includes two main parts: the first part asks for general business details (similar to annual reports in other states), and the second part requests information about business personal property (this is unique to Maryland). Each of the legal entities listed above, whether it owns personal property or not, is required to submit the combined Annual Report and Business Personal Property Return.

While sole proprietorships and general partnerships do not have to submit an annual report, if they own any personal property for their business, they need to complete Form 2, Business Personal Property Return and submit it annually to the State Department of Assessments and Taxes. 

What information must an MD annual report contain?

The Maryland annual report asks for quite a bit of information, covering general business specifics—like name, mailing address, ID numbers, total gross sales, and an email address—and details about business personal property. If a business owns, leases, or uses personal property, including inventory, located in Maryland, with a total original cost of $20,000 or more, it is required to complete the personal property section of the annual report.

Business personal property may include:

• Furniture tools, machinery, and other types of equipment
• Inventory for sale
• Supplies that are not for sale (like office supplies)
• Manufacturing inventory (like raw materials and goods)
• Non-farming livestock

Certain entities that have an annual operating budget or annual sales of more than $5 million are required to submit the Corporate Diversity Addendum along with the annual report. The Corporate Diversity Addendum asks for information about the demographics of a business’s executive leadership team as well as corporate diversity indicators, such as diversity, equity, and inclusion (DEI) policies.

Additionally, for corporations submitting an annual report, Maryland requires them to list the names and mailing addresses of corporate officers and names only of directors. 

Who qualifies as a corporate officer?

For the purposes of the MD annual report, a corporation’s president, vice president, secretary, and treasurer qualify as corporate officers.

Who qualifies as a director?

According to Maryland state law, corporations are required to have at least one director, whose qualifications are governed by the company’s charter or bylaws. A director serves on the organization’s board of directors.

The specific roles and duties of the board of directors may vary from company to company, but they generally involve making strategic decisions about the future direction of the organization. Instead of managing day-to-day operations, the board of directors remains high level, appointing corporate officers, maintaining shareholder interests, and guiding the business toward continued success. 

How to file your Maryland annual report in 3 steps

There are a few steps you need to take when filing annual reports in Maryland.

Step 1: Gather the necessary information

To make filling out the annual report a more seamless process, it may be helpful to compile all of your business’s information ahead of time. Ensure that you have all the necessary details, like the names and mailing addresses of corporate officers, your federal EIN and Maryland State Department of Assessments and Taxation (SDAT) ID, a list of personal property that your business owns or leases and its total cost, and other required elements.

Step 2: Go to the Maryland SDAT website

The easiest way to fill out and file your annual report is through SDAT’s Maryland Business Express online platform. Here, you’ll find helpful information, FAQs, and a place to create or log in to your Maryland Business Express account, which is required to be able to submit business filings, including your annual report, through this platform.

Businesses can also download the Annual Report and Business Personal Property Return form, fill it out digitally (handwritten forms will not be accepted), and mail it to the following address: 

• Maryland Department of Assessments and Taxation
• P.O. Box 17052, Baltimore, Maryland 21297-1052 

Step 3: Complete and submit your report

Log in to your Maryland Business Express account and follow the instructions to fill out your report. Provide your payment information for the filing fee, then submit your report by the due date.

How to file a Maryland annual report with LegalZoom

Completing a Maryland annual report can be time consuming, especially because the state requires fairly detailed information about your company, depending on if you own or lease any business personal property. Offload this yearly task to LegalZoom’s annual report filing service, where all you have to do is answer state-specific questions about your business—then, we do the rest. Your report will be completed and filed by the April 15 due date, ensuring that your business is compliant and remains in good standing.

How much does it cost to file an annual report in Maryland?

The Maryland annual report filing fees are $300 for most types of companies. For example, if you’re filing a Maryland LLC annual report or one for a domestic stock corporation, the fee will be the same. Additionally, if your report is filed online, there is an added credit card service charge of 3%.

However, there are some exceptions to this standard filing fee. Businesses that qualify as SDAT-certified family farms have a $100 filing fee, and the following categories of business entities do not incur any filing fees for their annual reports and/or business personal property return: 

• Sole proprietorship
• General partnership
• Domestic nonstock corporation
• Foreign nonstock corporation

When is the deadline to submit a Maryland annual report?

For all Maryland businesses, annual reports are due by April 15 every year. They must be filed online or postmarked by this date. If April 15 falls on a weekend, then the due date is the following Monday. 

What are the penalties for not filing annual reports in Maryland?

If a business doesn’t submit or postmark its Maryland annual report and business personal property return by the April 15 due date (or the following Monday, if April 15 falls on a weekend), it may incur financial penalties. The initial penalty for any late report is calculated at 0.001% of the county assessment of the value of any business personal property. For every 30-day period that the report is late, an extra financial penalty of 2% of the initial penalty amount will accrue.

Even if a business doesn’t have to fill out the personal property section of the annual report (which determines the late fee amount), failure to submit the required form could result in a loss of good standing or the state revoking the entity’s ability to do business in Maryland. 

To reinstate good standing, businesses will need to pay all outstanding penalties, submit their annual report and pay the associated filing fee, and reapply for a certificate of status (also known as a certificate of good standing in other states).

Do all business entities need to file an annual report in Maryland?

All legal business entities in Maryland must file an annual report and/or a business personal property return. This includes sole proprietorships, general partnerships, domestic and foreign stock and nonstock corporations, LLCs, limited partnerships, limited liability partnerships, certain trusts, and SDAT-certified family farms. 

FAQs

Can you submit an annual report early?

You can submit an MD annual report on or before April 15 of each year.

Do I need to pay a franchise tax in Maryland?

No, you likely don’t need to pay a franchise tax in Maryland. The only businesses that are required to pay franchise tax in Maryland are public utility companies, like electric and natural gas companies. Corporations, LLCs, and other types of business entities that are not public utility companies do not pay state franchise tax.

Can you file an annual report by mail?

Yes, Maryland businesses can file an annual report by mail to the Maryland State Department of Assessments and Taxation, but remember that this agency does not accept annual report forms that have been completed by hand. Instead, download the appropriate report form, fill it out digitally, then print and mail by the April 15 due date.

Do nonprofits need to file an annual report in Maryland?

Yes, nonprofits need to file an annual report in Maryland. They will submit Form 1, Annual Report and Business Personal Property Return.