Maryland Business Property Tax: Some Key Items of Interest for Small Businesses

I had a meeting with an accountant and some financial business advisors. They were all quite informative as we prepared for the upcoming tax season. I'd heard recently from a friend in business that I must be sure to pay my Maryland Business Property Tax. I assured him that my rental property business taxes were paid. I informed him that my mortgage company paid it through my escrow account. He informed me that because you are a Maryland Business you must pay a Business Property Tax just to be in business. I could not believe it.

Annual Business Property Tax Grace Period

I started my business and never once paid this tax in two years. Honestly the first year I really didn't do much with the business. I had the idea and just did nothing for about a year. I had basically no revenue and no expenses. My friend's statement to me about the Business Property Tax put me in an awkward position. I thought surely this property tax did not apply to those in business without property. I was informed that the Maryland Property Tax was for all business with or without property. I wondered what would happen and what the penalty would be for not paying the tax for two years. I thought about it a few times after speaking with him later. However, I completely forgot about it in less than a month.

During the 2007 tax season, the Maryland Business Tax was mentioned again at my meeting with the accountants and others. In this case, I met with state officials during a meeting in Baltimore. We were discussing the MBE and DBE differences. The MBE (Minority Business Enterprise Program) and the DBE (Disadvantage Business Program) have a joint application process. We were going over the filling process with the sate. The MBE is a state program. The DBE is a federal program. As a whole, I was learning what is required to complete this lengthy application process. During this meeting I was informed of a 1 year grace period that every business gets from the Maryland Business Property Tax. When you start your business you do not have to pay the Business Property Tax until the following Tax year.

Reason for Maryland Business Property Tax