Frequently Asked Forfeiture Questions
Forfeiture is the process that allows the Department to remove inactive entities that have not legally terminated their authority to do business in Maryland or to notify active entities of an existing oversight in meeting legal filing requirements. The Department sends forfeiture notices to these entities identifying the delinquency.
The main causes of forfeiture are failure to:
- file a previous year Form 1 (annual report/personal property return) by a domestic entity
- file a current year Form 1 by a foreign entity
- pay an outstanding late filing penalty resulting from the late filing of a Form 1
- reimburse the Department for a dishonored filing fee check.
A business can avoid forfeiture by filing the delinquent Form 1, paying the late filing penalty or making good the dishonored filing fee check before the deadline date cited in the Final Forfeiture Notice. Visit our website's Business Data Search
All entities are required to file a Form 1 by April 15th if they existed as of January 1st. The Form 1 is due whether or not it owns property.
Nothing if the entity did not own any personal property in Maryland. The forfeiture process is automatic. However, if the entity owned business personal property and had an assessment in the previous year, it MUST notify the Personal Property Division of the disposition of the personal property previously reported. Failure to do so will result in estimated assessments and tax bills, regardless of the forfeiture taking effect.
Also, we do not accept faxed documents for this filing.
The notice will indicate the year that has not been filed. Be sure that:
- the specified year was filed
- the correct report was filed (Form 1)
- the correct Department ID number was used.
The Form 1 is based on the date of finality (January 1). Property in Maryland on January 1st must be reported regardless of the entity’s fiscal year.
As a service to businesses, the Department created the Potential Forfeiture list to give taxpayers an early notification option since we no longer mail Domestic Reminder Notices. The online service is available annually from July through September. Using this list, taxpayers can identify the reason for an upcoming forfeiture and resolve it before the mailing of a Final Forfeiture Notice in early October and eventual forfeiture in December. This search only includes domestic legal entities as foreign legal entities will be mailed a reminder notice as required by law in September.
No, you will only need to pay the amount indicated on the notice. However, if a penalty remains unpaid, it will be referred to the State of Maryland Central Collection Unit, which will add an additional 17% to the amount due. This will occur even if the forfeiture proceeds.
If the Department's records indicate a domestic legal entity has not filed a required Form 1, owes a late filing penalty or has failed to reimburse the Department for a dishonored check, the entity will appear on the Potential Forfeiture Search.