Maryland is the only state where the assessment process is centralized at the State level.
For tax purposes, the State Department of Assessment and Taxation appraises real and personal taxable property at market value and certifies these values to local governments. Based on the assessment and property tax rates set by each county and incorporated municipality, local jurisdictions send out property tax bills in July or August of each year. Programs that provide property tax credits, primarily to homeowners and renters who meet eligibility requirements, also are directed by the Department.
While the Department is responsible for administering Maryland's real and personal property tax laws, it also oversees certain functions relating to corporations, such as issuing corporate charters, and collecting certain taxes, such as the gross receipts tax.
Formerly located at 301 West Preston St., Baltimore, the Department moved on April 15, 2024 to 700 East Pratt St., Baltimore.
For each county and Baltimore City, the Director of Assessments and Taxation appoints a supervisor of assessments nominated by the mayor of Baltimore, the county commissioners, or, under charter government, by the county council or the county executive with county council consent.
Based in Baltimore, the Director oversees the Department's headquarters, as well as the assessment and taxation offices found in each of Maryland's counties and Baltimore City.
Under the Department are five divisions: Business Services, Finance and Administration, Real Property Valuation, Shared Services, and Taxation.
Franchise taxes, property tax credit programs, and the issuance of corporate charters in Maryland are overseen by the Division.
Two main units carry out Division work: Business Charter and Business Property Valuation.
BUSINESS CHARTER
Anyone wishing to legally form a business does so through the Business Charter unit within the Taxpayer Services Division. Such businessses include corporations, limited liability companies, limited partnerships, limited liability partnerships, and business trusts. Out-of-state entities doing business in Maryland also must register.
The reporting of all resident agents for service of process, the collection of the annual filing fee charged certain business entities, and the maintenance of a system for providing "certificates of status" needed in busines and commerce are responsibilities of the Unit.
Business Charter is custodian of domestic charters for Maryland corporations and of qualifications and registrations for limited partnerships and foreign corporations. Specified fees are collected, and the personal property of such corporations is assessed by the Unit. Thereafter, the values are certified to the subdivisions for application of local tax rates and Personal Property Assessments. Business Charter also is responsible for processing "ground rent" redemptions and registrations.
BUSINESS PROPERTY VALUATION
Business Property Valuation oversees the annual reassessment of business personal property, including operating property of railroads and public utilities. With the Department, the counties and Baltimore City share the costs of the reassessments.
Franchise taxes applicable to the net income of savings and loan associations and other financial institutions, and to the gross receipts of public service corporations, are administered by the Department. In addition, the Division administers the property tax component of the Enterprise Zone Property Tax Credit Program.
Under the Deputy Director of Assessments and Taxation, the Finance and Administration Division oversees Accounting, Budget, Compliance and Records Management, Equal Employment Opportunity, Facilities, Human Resources, Information Technology, and Procurement.
BUDGET
For the Department, Budget oversees budget preparation.
COMPLIANCE & RECORDS MANAGEMENT
Since October 1, 2017, the State Department of Assessment and Taxation has had a program for the continual, economical and efficient management of its records. The Department's Records Officer develops and oversees the program, and serves as liaison to the Records Management Division of the Department of General Services, and to the State Archives (Chapter 539, Acts of 2017; Code State Government Article, secs. 10-608 through 10-611).
Maryland's system of real property assessment has been based on 100 percent of the market value of the property since July 2001 (Chapter 80, Acts of 2000). To ensure the accuracy of assessments, the Division makes an annual assessment ratio survey by comparing actual sales with assessment levels in various subdivisions. This survey also determines how well local assessment offices are keeping pace with current property values.
Property owners are notified of any change in their assessment. Increases in value over the previous appraisal must be phased in over three years. For example, an increase of $30,000 would add $10,000 per year to the old value.
Once assessments are certified by the State Department of Assessments and Taxation, local governments apply local tax rates to convert them into tax bills. Tax bills and collections are administered by local government finance or treasurer's offices.
Maryland law provides for a three-tier administrative appeal process: the Supervisor's Level Hearing; the Property Tax Assessment Appeals Boards; and the Maryland Tax Court. Where assessment questions are involved, the Real Property Valuation Division participates in all court proceedings. The Division also provides clerical assistance to several local Property Tax Assessment Appeal Boards. Brochures explaining the assessment process and related matters, such as appeals and tax credits, are available on the Internet, and at each local assessment office.
Under the Real Property Valuation Division are the local assessment offices. These include an office in each county and in Baltimore City. The Division also oversees the Assessment and Administration Valuation System, and the Enterprise Zone Tax-Credit Program.
ASSESSMENT & ADMINISTRATIVE VALUATION SYSTEM
DATA ANALYTICS & ENTERPRISE ZONE TAX-CREDIT PROGRAM
Through the Enterprise Zone Tax-Credit Program, businesses which locate or expand facilities in a designated enterprise zone receive local tax credits on increased assessments for new capital investments and improvements. In the first five years, tax credits may be received on 80 percent of the increase. A declining percentage (from 70 percent to 30 percent) is available over the next five years.
Four units fall under the Division: Customer Experience, the Customer Service Contact Center, Information Technology, and Scanning and Printing.
INFORMATION TECHNOLOGY
The automated data systems of the State Department of Assessments and Taxation are administered and maintained by Information Technology. For each county and Baltimore City, the office also designs and maintains systems for real property, corporate charters, local personal property, and tax credits. These include the Real Property Data System, which maintains ownership and value information about parcels of real property; Home Owners' and Renters' Tax Credits; residential and commercial Computer-Assisted Mass Appraisal (CAMA) software to organize data used in assessing property values; and the Maryland Business Entity System (MBES), a searchable database containing business names, offices and resident agents, personal property assessments, and organizational document information. The costs of departmental projects are divided equally between the Department and local jurisdictions.
On the Internet, Information Technology offers a searchable database for real and personal property assessments, tax maps, sales data, corporate charter and Uniform Commercial Code information.
PROPERTY TAX-CREDIT PROGRAMS
In 2018, property tax credit programs provided more than $65 million in State-funded property tax credits to home owners and renters who qualified based on an income test.
Property Tax-Credit Programs include: the Home Owners' Property Tax Credit Program; the Homestead Property Tax Credit Program; and the Renters' Property Tax Credit Program.
HOMESTEAD PROPERTY TAX-CREDIT APPLICATION PROGRAM
Since 2007, to receive the credit, property owners must submit a one-time application certifying that the property is used as their principal residence. Taxpayers are not entitled to the Homestead Tax Credit on rental properties or vacation homes.
RENTERS' PROPERTY TAX-CREDIT PROGRAM
Modeled after and designed to be similar in principle to the Homeowners' Tax Credit Program, the Renters' Property Tax Credit Program recognizes that renters indirectly pay property taxes as part of their rent, and thus should have some protection, as do homeowners. The Program assumes that 15% of rent paid is attributable to property taxes. If that portion exceeds a fixed amount in relation to gross income, the renter may receive a credit of up to $600.
STATE TAX SALE OMBUDSMAN
The State Tax Sale Ombudsman’s Office helps homeowners understand the tax sale process, and navigate the tax sale system. It connects them to housing and financial counseling, legal services, and other benefits programs; and helps them apply for tax credits and other resources.
An Annual Tax Sale Survey of the counties is conducted by the Office. Annually, the Office submits to the General Assembly an Annual Tax Sale Report, which summarizes and analyzes Survey results, as well as activities of the Office that year.
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Formerly within the Taxpayer Services Division, the Business Charter Unit was made part of the Business Services Division by 2023.
FINANCE & ADMINISTRATION DIVISION
In 1998, the Finance and Administration Division started. In March 2017, it reorganized as the Finance and Budget Division, and in September 2017 was renamed the Budget Division. By 2023 it returned to its former name.
Budget formed in 1992 as the Business Services and Finance Division from the merger of the Corporate Charter Division and the Corporate Assessments Division. It reformed in 1998 as the Finance and Administration Division, when responsibilities of these two divisions (along with Franchise Taxes, and Utility and Railroad Valuation) transferred to the Taxpayer Services Division. In March 2017, it reorganized as the Finance and Budget Division, and in September 2017 was renamed the Budget Division. When the Finance and Administration Division reformed by 2023, the Budget Dvision was made a unit of the Division.
Compliance and Records Management began as separate units, which merged by 2023.
REAL PROPERTY VALUATION DIVISION
Since 1980, real property has been reassessed on a three-year cycle by the Real Property Valuation Division. Every year, one-third of all residential, commercial, industrial and agricultural properties in Maryland are reviewed. Assessors monitor and analyze real estate sales in Maryland and may conduct an exterior physical inspection of a property. Each county and Baltimore City is required to reimburse the State for the costs of conducting real property valuations. For FY2012 and FY2013, the reimbursement rate is 90 percent; for each year thereafter, 50 percent.
Data Analytics and Enterprise Zone Tax-Credit Program began as the Enterprise Zone Tax-Credit Program under Business Property Valuation. The Program transferred to Property Tax-Credit Programs in June 2017, and later to the Real Property Valuation Division, where it reformed under its current name in January 2024.
SHARED SERVICES DIVISION
The Shared Services Division formed within the State Department of Assessments and Taxation by 2023.
In 1993, Information Technology was created as Management Information Services under the Taxpayer Services Division. In July 1998, Management Information Services was made a separate division. In August 2000, it reformed as the Information Technology Division, and later as the Office of Information Technology. Formerly under the Director of Assessments and Taxation, the Office of Information Technology was placed under the Deputy Director of Assessments and Taxation in April 2019. It was made part of the Shared Services Division by 2023.
TAXATION DIVISION
The Taxation Division oversees Property Tax-Credit Programs, and the Office of Tax Sale Ombudsman.
Property Tax-Credit Programs formerly were part of the Taxpayer Services Division, and joined the Tax Division by 2023.
HOME OWNERS' PROPERTY TAX-CREDIT PROGRAM
The Home Owners' Property Tax Credit Program sets a limit on the amount of property taxes that can be levied. If a home owner's tax exceeds a certain percentage of the home owner's gross income, credits are applied against the property tax bill. The Program is available to all low- and fixed-income home owners in Maryland, regardless of age.
To help homeowners deal with large assessment increases on their principal residence, State law has established the Homestead Property Tax Credit. The Homestead Property Tax Credit Program limits the increase in taxable assessments each year to a fixed percentage, and thereby limits the annual assessment increase against which a resident home owner pays State and local property taxes. Every county and municipality in Maryland is required to limit taxable assessment increases to 10% or less each year.
The Renters' Property Tax Credit Program applies to permanently disabled; renters aged 60 or over; or renters who are under age 60, with dependent children, and who meet certain income requirements.
Effective January 1, 2020, the State Tax Sale Ombudsman was authorized by the General Assembly to be part of the State Department of Assessments and Taxation (Chapter 730, Acts of 2019; Code Tax-Property Article, sec. 2-112).
HOMEOWNER PROTECTION PROGRAM
In July 2022, the General Assembly established the Homeowner Protection Program within the State Department of Assessments and Taxation (Chapter 382, Acts of 2021). The Program diverts vulnerable homeowners from the private tax lien sale process into an alternative program. Its intent is to minimize tax collection costs to owners, help owners pay their taxes, and allow owners to remain in their homes. This added level of assistance to homeowners includes a loan program and repayment plan administered by the State Tax Sale Ombudsman (Code Tax-Property Article, secs. 14–811(g), 14–883 through 14–891).
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