As an e-commerce seller, you will need to collect sales tax in Maryland if you have:
(1) Gross revenue exceeding $100,000 or 200 or more separate transactions in the previous calendar year or current calendar year (economic nexus),
(2) Physical presence in Maryland (physical nexus).
Below, we will highlight some of the basic provisions of Maryland sales tax law.
What is the tax rate range for Maryland?
State: Maryland’s general sales tax rate is 6%.
Local: Maryland does not have local sales tax jurisdictions.
Maryland Sales and Use Tax - Comptroller of Maryland - Tax Rates
Do you have physical or economic nexus in Maryland?
Physical nexus. Certain business activities create physical nexus in Maryland. If you have physical nexus, you are required to collect and remit sales tax on all taxable sales that are shipped to Maryland. Examples of business activities that can create physical nexus in Maryland include:
- Permanently or temporarily maintains, occupies, or uses any office, sales or sample room, or distribution, storage, warehouse, or other place for the sale of tangible personal property or a taxable service directly or indirectly through an agent or subsidiary
- has an agent, canvasser, representative, salesman, or solicitor operating in the state for the purpose of delivering, selling, or taking orders for tangible personal property or a taxable service
- Enters the state on a regular basis to provide service or repair for tangible personal property
- Regularly uses the person's vehicles to sell or deliver tangible personal property or a taxable service for use in the State
Maryland Sales and Use Tax - Nexus Information For Sales & Use Tax
Economic nexus. Maryland recognizes economic nexus for any vendor with more than $100,000 in gross revenue or 200 or more separate transactions into the state in the previous calendar year or the current calendar year. Once you have economic nexus established, you will be obligated to register and collect sales tax.
- Gross revenue means the gross revenue from the sale of tangible personal property or taxable services delivered into Maryland.
- Sales transactions means the sale of tangible personal property or taxable services for delivery into Maryland in separate transactions.
- Registration is required by the first day of the following month in which either of the thresholds was met.
Maryland Sales and Use Tax - Nexus Information For Sales & Use Tax and Tax Alert on Sales Tax Nexus
What are examples of sales of taxable items?
- Tangible personal property, unless an exemption applies
- Certain services
- Food, unless a person operating a substantial grocery or market business sells the food for consumption off the premises – Information About Sales of Food
- Digital products and digital codes - Business Tax Tip #29
- Software as a Service (SaaS) - Business Tax Tip #29
What are examples of sales of nontaxable/exempt items?
- Over-the-counter and prescription medicines
- Medical equipment that can repeated use and is for use in a person’s home - Medicine and Medical Equipment
- Farm equipment – Business Tax Tip #11
Are there any sales tax holidays?
Maryland recognizes two sales tax holidays:
Annual back to school sales tax holiday beginning at 12:01 a.m. on the second Sunday in August through midnight on the following Sunday
- Qualifying clothing and footwear priced $100 or less are exempt
- The first $40 of back/bookbag sales are exempt
Annual Energy Star products holiday begins 12:01 a.m. on the Saturday immediately preceding the third Monday in February and 11:59 p.m. on the third Monday of February
- Qualifying Energy Star products are exempt
Is Maryland a member of the SST (Streamlined Sales Tax)?
Currently, Maryland is not a full or associate member of the Streamlined Sales Tax (SST) project.
How to get a sales tax permit / links to register in this state?
You can register online at: Comptroller of Maryland - Interactive Web Services
Maryland does not have local sales tax jurisdictions.