Maryland Sales Tax

Maryland Sales Tax Rates

• Maryland (MD) State Sales Tax Rate: 6.0%
• Local Tax Range: 0% (None)
• Maximum Combined Rate: 6.0%
• Special Rate (B2B Digital Services): 3.0% (Effective July 1, 2025, for specific data processing and information technology services sold to businesses).
• Cannabis Rate: 12.0% (Increased from 9% on July 1, 2025).

Tax Sourcing

Maryland is a Destination-Based Sourcing state.

• General Rule: The tax rate is determined by the location where the customer takes possession of the property or where the service is received.
• Out-of-State Sales: Items purchased from outside Maryland and delivered to a Maryland address are subject to the 6% Maryland use tax.

Maryland Nexus

The first step in determining if you need to collect sales taxes in the State of Maryland is to check if you have sales tax nexus in the state. Nexus refers to physical or economic presence in the state and applies to those who have a significant presence that would require them to collect sales tax on certain transactions. The State of Maryland maintains a comprehensive list of what it considers to be sales tax nexus in the state on the Maryland Department of Revenue website here.

Physical Nexus

• Physical goods located in a Maryland warehouse (such as an FBA warehouse)
• An employee who is physically present in the state
• Any ownership of property or personal property in the state
• Office or physical place of business in the state
• If a company enters the state repeatedly for service or repair to tangible personal property such as heating and cooling systems

For those who utilize the Amazon FBA program, if your inventory is stored in Maryland locations, you may be required to collect sales tax on transactions made with those goods. You should establish in advance where your goods are being stored by Amazon as part of the FBA program.

Economic Nexus

Remote sellers must register if they meet either of the following thresholds in the current or previous calendar year:

• Gross Sales: Exceed $100,000 in gross revenue from sales into Maryland.
• Transaction Count: 200 or more separate transactions into Maryland.
• Inclusion: Maryland includes tax-exempt sales and sales for resale when calculating these thresholds.

Marketplace Facilitators

Marketplace facilitators (Amazon, eBay, etc.) are required to collect and remit Maryland sales tax for all sales made through their platforms.

Reporting: If you sell only through marketplace facilitators, you are generally not required to register. However, if you have an active permit, you must file “zero” returns.

What is Taxable in Maryland

Tangible Goods

Most physical items are taxable at 6.0%.

• Exemptions: Unprepared groceries (staple foods), prescription drugs, and certain medical supplies (like diabetic test strips).
• Note: Snack foods (chips, pretzels, etc.) sold through vending machines are generally taxable.
• Different Rates – Some goods are taxed at different rates than the blanket sales tax rate in Maryland. For example, alcoholic beverages are taxed at a rate of 9% instead of 6%. An 11.5% tax rate is charged on certain vehicle rentals, and there are special tax rates for certain types of purchases or services that should be evaluated on the Department of Revenue website.
• Bringing Items in from Outside the State – If you purchase an item from outside the state of Maryland and bring it into the state, you may be responsible for paying sales tax on that item directly if it was not collected by the merchant.

Services

• In Maryland, most services are exempt from sales tax with the exception of Janitorial and Cleaning services of industrial or commercial buildings and security services, including residential and commercial monitoring, guard services, private detectives, and other security related services (not including alarm system installation). Maryland has a list of special exceptions on the Comptroller’s website.

Shipping and Handling

Shipping and handling charges are taxable if they are part of a taxable sale, even if they are separately stated on the invoice.

Digital Goods and Services

Maryland has one of the most specific digital tax codes in the country:

• Digital Products: E-books, digital music, and streamed movies are taxable at 6.0%.
• SaaS (B2C): Software as a Service sold to individuals is taxable at 6.0%.
• SaaS & Data Services (B2B): Effective July 1, 2025, a reduced 3.0% rate applies to B2B sales of computing infrastructure, data processing, and web hosting.

Exceptions

Exceptions to sales tax in Maryland include prescription medicine and equipment, farm equipment, equipment used in general production, and certain types of snack food. You can read a full list of tax-free exceptions on the Department of Revenue website.

Because these factors can change over time and because each situation is unique, be sure to check the Department of Revenue website or speak with a Maryland representative regarding any sales tax exemptions.

Sales Tax Holidays

Maryland hosts two annual tax-free events:

• Shop Maryland Energy Weekend (February 14–16, 2026): Exempts certain Energy Star appliances (refrigerators, washers, AC units) from the 6% tax.
• Shop Maryland Tax-Free Week (August 9–15, 2026): * Clothing & Footwear: Exempt if priced at $100 or less per item.
• Backpacks: The first $40 of a backpack purchase is exempt.

Registration and Filing

To collect and pay taxes in Maryland you must register with the state and obtain a sales tax permit. The Department of Revenue provides both an online and paper version of the application on their website. If you are applying for exemption, you must use the paper version of this application:

• Register to collect, accrue and remit taxes.
• Combined Registration Application from the Department of Revenue.

Because Maryland uses a combined registration, you’ll need everything you would normally need to apply for a business license in another state. You’ll need a physical address Federal Employer Identification Number (FEIN), and a detailed account of your business activities in the state. The online version of this application will guide you in which sections you must fill out, streamlining the process.

Filing

You will pay Maryland sales and use tax by:

• For Those in State – Maryland is a destination-based sales tax state. So the sales tax is based on where someone lives when you send them their goods. Because the state has a flat 6% sales tax rate, this doesn’t affect those who operate fully in the state.
• Out of State Sellers – If you are not located in the state of Maryland but have sales tax nexus and must collect sales tax on your sales there, you will once again collect at a flat 6% rate. It is important to ensure you establish that nexus first, so you are collecting properly. Separately stated shipping charges are not taxable in the state, though handling is so if the two are combined, sales tax must be collected on both.
• Filing Your Return – You can pay sales tax to the state of Maryland through their bFile online portal.

Your sales tax filing frequency is based on your total tax liability and is assigned when you apply for your permit. This can change in the future if your liability changes.

Like many states, Maryland offers a discount to those who pay their sales tax on time – the discount is 1.2% of the first $6,000 collected and 0.9% after that. You may only claim a $500 discount for each filing period – making the maximum annual discount $6,000 if you file monthly.

Deadlines

Quarterly: The following deadlines apply to those whose sales tax liability in Maryland requires them to file quarterly

Period	Due Date
January – March (Q1)	April 20
April – June (Q2)	July 20
July – September (Q3)	October 20
October – December (Q4)	January 20

Monthly: The following deadlines apply to those whose sales tax liability in Maryland requires them to file monthly:

Period	Due Date
January	February 20
February	March 20
March	April 20
April	May 20
May	June 20
June	July 20
July	August 20
August	September 20
September	October 20
October	November 20
November	December 20
December	January 20

Annual: The state may also allow you to file once per year if your tax liability is low enough.

Penalties and Interest

If you are late in filing or paying your sales tax owed, there are penalties you may be liable for. The penalty for late filing is up to 25%, and for calendar year 2025, the interest rate is 11.4825%.

The state requires that you file a sales tax return even if zero tax is owed. This can result in a penalty if you don’t submit it by your return due date.

Resources

• Maryland Department of Revenue (Maryland DOR) Website
• Online tax filing and business portal for Maryland
• Maryland Form SUT097 for out of state sales tax collection

Maryland Sales Tax Software

Maryland’s sales tax system is relatively simple compared to some other states, but if you operate in other nearby states or if you are out of state operating in Maryland, you can streamline and simplify how this process works with TaxTools sales tax software. TaxTools’ sales tax calculator provides a range of sorting and data review tools that will help to calculate the sales tax owed based on location and where transactions originate or end. Contact us today and ask to learn more about how TaxTools helps with Maryland sales tax, or click here to signup for a free trial.

Last edited March 2026