TaxJar’s sales tax guide and calculator helps businesses understand the guidelines for the state of Maryland, demystifying the uncertainty of economic thresholds that trigger a sales tax obligation for the state. TaxJar simplifies the sales tax process, ensuring you never miss a deadline or a payment.
Do you need to collect sales tax in Maryland?
Businesses and online sellers need to collect sales tax in Maryland if they have physical or economic nexus. Physical nexus means the business has a tangible presence or activity in a state. Economic nexus means that the business (or seller) posted sales that met a state’s economic threshold for total revenue or number of transactions.
Do you have physical nexus in Maryland?
Maryland considers a seller to have physical nexus if they meet any of the following conditions:
- An office or place of business in Maryland
- An employee present in the state
- Goods in a warehouse (located in Maryland)
- Ownership of real or personal property
- Making repeat entries to the state for service or repair to tangible personal property
The Maryland Department of Revenue offers an FAQ for businesses that explains economic and physical nexus and other tax-related topics.
Do you have economic nexus in Maryland?
Effective October 1, 2018, Maryland law states that vendors who make more than $100,000 in sales annually in the state or more than 200 transactions in the state in the previous or current calendar year to have economic nexus. These vendors are obligated to collect sales tax from buyers in the state in accordance with Maryland’s tax law.
Maryland offers additional details and insights about its economic nexus guidance for sellers, and TaxJar also provides a comprehensive synopsis about economic nexus in every state.
Is what you’re selling taxable?
Services in Maryland are generally not taxable, with a few exceptions.
Tangible products are taxable in Maryland, with a few tax exemptions. These exemptions include snack food, prescription medicine and medical devices, and farm equipment.
Is SaaS taxable in Maryland?
SaaS is taxable in Maryland.
How to get a sales tax permit in Maryland
Register online or download the paper sales and use tax permit application at Maryland Business Express, . You can also visit our registration page to request that TaxJar manage your Maryland registration for you.
If you choose to fill out the paper application, mail it to:
Comptroller of Maryland
Revenue Administration Center
110 Carroll Street
Annapolis, Maryland 21411-0001
Or fax it to: (410)260-7908
What information is needed to register for a sales tax permit in Maryland?
- Reason for your application
- Basic business information
- Your business type (sole proprietorship, corporation, etc.)
- The type of business you run (dry cleaner, limousine, food and beverage, etc.)
- The start date you’ll begin collecting sales tax
- Other business owners
If you live and operate your business out of state but have sales tax nexus due to storing products in a warehouse, such as in an Amazon Fulfillment Center, enter your permanent business address.
It is free to register for a sales tax permit in Maryland. Other business registration fees may apply.
Collecting sales tax
The sales tax rate you collect in Maryland depends on whether you are based in Maryland or out-of-state.
How to collect sales tax in Maryland if you are based in Maryland
Maryland is a destination-based sales tax state. So if you live in Maryland, collecting sales tax is based on where your customer lives. Luckily, Maryland is one of the few states with no local tax rates, so you would only charge the state sales tax rate of 6%.
You can look up your local sales tax rate with TaxJar’s Sales Tax Calculator.
How to collect sales tax in Maryland if you are not based in Maryland (but have sales tax nexus in the state)
Maryland wants sellers who made a sale into Maryland from outside the state to charge sales tax based on the destination of the buyer. Fortunately, this is easy because Maryland has a standard sales tax rate of 6%. There are no local tax rates in Maryland.
Should you collect sales tax on shipping charges in Maryland?
Separately stated shipping charges are not taxable. However, handling charges are taxable; if the shipping and handling charges are combined, then the shipping charge becomes taxable.
When are returns due?
When you file and pay Maryland sales tax depends on your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in Maryland?
States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.
In Maryland, you will be required to file and remit sales tax either monthly, quarterly, semiannually or annually.
Maryland sales tax returns are always due the 20th of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.
Filing sales tax
When it’s time to file sales tax in Maryland, focus on these three steps:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
How to calculate the sales tax you owe in Maryland
Calculating how much sales tax you should remit to the state of Maryland is easy with TaxJar’s Maryland sales tax report.
Connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your Maryland sales tax return will be waiting for you in TaxJar. All you have to do is login.
How to file and pay sales tax in Maryland
You have three options for filing and paying your Maryland sales tax:
- File online – Visit the Maryland Tax Connect site to file. You can remit your payment through their online system. Click here for our step-by-step guide to filing a Maryland sales tax return.
- File by mail – You can use Form 202 and file and pay through the mail. However,you must file and pay online if your tax liability in the previous year was $1,000,000 or more.
- AutoFile – Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations, or filling out complex sales tax returns.
