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Stuck on taxes, rather than your customers?We’ll tell you how
Maryland: the small, mid-Atlantic state that curls around Washington, D.C. and brags about its blue crabs. (We’re sure they’re delicious!) What we don’t hear much about is the sales tax laws that could affect your business.
If you’re selling in Maryland, you might be on the hook for collecting and remitting sales tax. How much should you charge, and how much will you owe? Let’s explore the basics of Maryland sales tax in this guide.
Sales Tax Rates in Maryland
Maryland uses a state sales tax rate of 6.0% and has no additional local sales tax. That means sales to any county or city in Maryland will all have the same flat rate of 6%. Easy!
What is taxable in Maryland?
- Tangible products are generally taxable in Maryland, with a few exceptions. You can find a list of examples in the next section!
- Services are generally not taxed, except for a few specific ones, such as telecommunications or the creation of custom products (“fabrication, printing, or production by special order”). There can be tricky distinctions, too. For example, a home cleaning service is not taxable, while an office cleaning service is.
- Digital products like mobile apps, SaaS, and video/audio streaming services are not taxed in Maryland.
Sales Tax Exemptions
Some purchases in Maryland are exempt from consumption tax collection. A few include:
- Most groceries, such as butter, milk, and canned goods (candy and soda don’t count!)
- Vitamins, minerals, and medicine
- Medical supplies and certain items related to hygiene and childcare
- Religious items
- Wind and solar energy equipment
- Construction equipment and raw materials
- Any service that’s repairing an item to a useful condition
Certain types of customers are exempt from Maryland sales tax, too. Government agencies, religious organizations, some non-profits might not have to pay sales tax to you.
Making Sense of Maryland Taxes
If you’re confused about whether your goods are subject to sales tax in Maryland, we hear you. Collecting and remitting the correct amount of tax in the state is complicated – especially when you add the economic nexus and Amazon service into the equation.
Fortunately, you don’t have to go it alone. Sign up for a free trial with Quaderno to see how easy and pain-free tax collection can be with the right partner by your side.
Note: At Quaderno we love providing helpful information and best practices about taxes, but we are not certified tax advisors. For further help, or if you are ever in doubt, please consult a professional tax advisor or the Tax Agency.