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Frequently Asked Questions for Businesses

Below you will find frequently asked questions concerning Admissions and Amusement taxes.

The admissions and amusement tax is imposed by county and municipal governments at rates varying up to 10 percent of gross receipts from taxable activities.

Effective June 1, 2009, electronic bingo and electronic tip jars are subject to a state admissions and amusement tax of 30 percent, which is imposed on the net proceeds.

If the gross receipts are subject to both taxes, as in the rental of sporting equipment, the rate of the admissions and amusement tax is limited to 5 percent.

You can download a rate chart to or obtain one by calling the Taxpayer Service Division at 410-260-7980 in the Baltimore area, or 1-800-638-2937 from elsewhere in Maryland. Once a registered taxpayer has filed an initial return, subsequent returns will be pre-printed with the correct rates for previously-reported activities.

No. The local admissions and amusement tax is a gross receipts tax imposed solely upon the person receiving the taxable receipts. The thirty (30%) percent state admissions and amusement tax on electronic bingo and electronic tip jars is imposed on the net proceeds. In either case, unlike the sales and use tax, there is no requirement to make a separate charge for the admissions and amusement tax. You must, however, report the net proceeds and state admissions and amusement tax due on electronic bingo and electronic tip jars separately on your admissions and amusement tax return.

No. The tax owed the state is the same whether calculated on a separately-stated or tax-included basis.

If a business in Baltimore County, where the rate is 10 percent, has receipts from tax-included admissions totaling $9,900 for the reporting period, the tax is computed as follows:

  1. Convert the tax rate to a decimal and add 1: .10 + 1 = 1.10
  2. Divide the total receipts by the number obtained in Step 1 to find taxable gross receipts: $9,900 ÷ 1.10 = $9,000
  3. Multiply the answer to Step 2 by the tax rate to find the tax: $9,000 x 10 percent = $900
  4. Report taxable gross receipts of $9,000 and tax of $900

You should ignore it. The admissions and amusement tax is not reduced because your customers may have a sales and use tax exemption certificate, diplomatic exemption card or other evidence of exemption.

Generally not. The admissions and amusement tax is a gross receipts tax and not an income tax permitting the deduction of expenses. The only exception is in Anne Arundel County (outside of any municipality) where the cost of prizes in bingo games may be deducted before computing the tax.

An additional tax is imposed on reduced charges or free admissions in most, but not all, subdivisions. If the jurisdiction imposes this tax, the tax is 5 cents for each ticket if the regular price is less than 50 cents, 10 cents for each ticket if the regular price is less than $1.00, and 15 cents for each ticket if the regular price is $1.00 or more.

No. The tax on reduced charge or free admissions is payable in full even if the actual amount of taxes payable would exceed 10 percent of gross receipts.

Yes. Once you are registered, you must file a return even if you have no taxable receipts to report and owe no tax.

If you have a lottery terminal, you must stay current with your admissions and amusement tax to retain the terminal.

If you own or operate a theater, hall, park or other facility which is rented or leased for taxable activities, you must report those rentals to the Comptroller's Office. For more information, call 410-260-7980, Monday through Friday, 8:30 a.m. - 4:30 p.m.

Use your account number in all correspondence regarding your admissions and amusement tax account.

To change the name of your business, you must first report the change to the Maryland Department of Assessments and Taxation. (SDAT) by submitting a completed Trade Name Amendment or Cancellation Form with SDAT.

Next, send us a letter or e-mail confirming the new business name and attach a copy of your completed Trade Name Amendment, Cancellation Form or Amended Articles of Incorporation.

Please include the following in your correspondence:

  • Former business name.
  • New business name.
  • Business address and telephone number.
  • Nine-digit federal employer identification number (FEIN) or eight-digit Maryland central registration number.

You can contact us by e-mail at taxhelp@marylandtaxes.gov or write to:

Comptroller of Maryland
Revenue Administration Center
Taxpayer Service Division
Annapolis, Maryland 21411

To report other business-related changes with SDAT, see SDAT's Forms and Applications

The Field Enforcement Division of the Comptroller of Maryland's Office is responsible for checking the quality of petroleum products sold in Maryland. Motor fuel inspectors cover every region of the state. They enforce provisions regulating containers and vehicles used to transport and store all motor fuels, signs advertising prices for gasoline and special fuels, and waterborne movements of motor fuels - interstate, intrastate and/or all points of the supply chain, from terminal or ship to bulk plant, to distributor, to retail service station.

At retail service stations, the inspector will look for the price posted, brand identification, pump price display, pump decals that show octane ratings, color coded fills, the four most recent delivery tickets, registration certificate and any appropriate special fuels tax exemption certificate. The inspector will draw and pay for each grade of product to be tested at the Comptroller's petroleum testing lab in Jessup, although some tests are conducted on site.

The inspector will want to see the trader's license and retail sales tax license for the business, and will inspect all cigarette inventory for proper stamps as well as reviewing all delivery invoices for cigarettes, other tobacco products and alcoholic beverages.

At bulk locations

The inspectors will check the vehicles for Department of Transportation markers, compartments, loading documents, transfer documents, name on tanks and color coding.

On The Spot Tests

On site testing includes tests for water and sediment in storage tanks, and a screening for octane.

Testing At The Lab

Once initial tests are done, samples are taken to the comptroller's petroleum testing lab. Samples are chilled before testing to preserve the integrity of the testing process. The testing lab conducts quality control tests to make sure petroleum products meet Maryland specifications. Routine tests include vapor pressure, distillation, octane ratings, water and sediment, oxygen content and percentage and type of oxygenate, if any, in gasoline.

Special fuels

Fuel oils, diesel fuels and kerosene are tested for flash point, distillation, sulphur content, API gravity, and, if applicable, viscosity, color and cetane index or cetane number.

Sample locations are randomly selected for analysis. The laboratory participates in national and regional exchange groups as part of its quality assurance program.

The inspector will leave a warning, noting the problem discovered and the time permitted to correct the problem.

The lab targets for a 24-hour turnaround. If a sample fails a test, a field inspector is immediately dispatched to issue a "stop sale" order for the fuel that does not meet specifications. The "stop sale" will be removed when the problem is corrected. Inspectors work with the distributor to discover the source and correct the problem.

We will tell you the problem with the fuel. You must contact the supplier to find out if the problem is correctable on site or if the product must be removed. You must contact the Field Enforcement Division at 410-260-7388 to discuss the proposed remedy. Once you receive authorization and the remedy is performed, contact us and we will re-sample the product promptly.

No. It's illegal to sell motor fuel that fails to meet quality standards. Penalties for not complying with the motor fuel inspection law and the stop sale order include a fine of up to $5,000 and/or one year in jail, a court ordered injunction prohibiting sale of the product and suspension of your registration.

The tax is imposed on the entire price whether paid in the form of money, promises, barter or anything else of value. It includes the amount of liabilities assumed by the buyer, the value of services performed for the vendor and, except for federal food stamps, the face value of any coupon for which the vendor can get reimbursement from another source. The taxable price is not reduced for any expense or cost for labor or service rendered, material used or any property sold except as explained below.
The taxable price may be reduced by separately-stated charges for installation, professional services, interest payments and delivery services. Additionally, the tax does not apply to consumer excise taxes, deposits, cash discounts and mandatory gratuity charges on food and beverage sales for groups of ten or fewer. Reductions to the taxable price must be made known to the buyer by documentary evidence in existence at the time of the sale. However, if these charges are included in a lump-sum price with no separate statement, the tax must be collected on the entire amount of the sale.
The sales and use tax is applied to the full price of the cigarettes without any deduction for tobacco taxes which may have been paid on the cigarettes.
Yes. For an interest charge to be deductible, it must be for credit extended to the buyer. Interest paid by the seller and re-billed to the buyer does not qualify. No part of a timely lease or rental payment may be treated as a deductible interest charge.
No. A store coupon is not included in the taxable price unless the vendor can get reimbursement from another source. Manufacturers' coupons, for which a store can get reimbursement, are included in the taxable price, however.
Warranty, maintenance, service agreement and insurance charges in connection with taxable sales are also taxable if the vendor requires them to be purchased or they are automatically included in the price of the merchandise. However, if the sale could be completed without paying these charges, they are not taxable.
Separately stated shipping charges are not taxable; however, handling charges are a part of the taxable price. Therefore, when the charges are combined, the shipping charge loses its exemption and the entire amount is subject to the tax.
7 - Are all labor charges exempt? No. The tax applies to fabrication labor charges. Fabrication or assembly labor charges are taxable even if the customer provides the materials.
The restoration of used property to its original condition or usefulness is repair, which is not taxable. The creation or completion of a new or different item is fabrication, which is taxable.
Under Maryland law, an out-of-state vendor must register with the Maryland Comptroller's Office to collect the tax if the vendor has sufficient presence or "nexus" in Maryland. For more information, see Nexus Information.

The Maryland corporation income tax applies to every Maryland corporation and every other corporation that has a nexus with Maryland. Nexus indicates a taxable connection between a corporation and a taxing authority. If a corporation conducts business activity within Maryland and exceeds the provisions of U.S.C.A. Title15, Section 381 of the Interstate Commerce Tax Act (P.L. 86-272), it has a nexus and must file a corporation income tax return, using Form 500. The following list includes some in-state activities which generally create nexus and are outside the protection of U.S.C.A. Title 15 Section 381 (P.L. 86-272):

  • Maintaining a business location in Maryland, including any kind of office.
  • Ownership or use of property in Maryland, real or personal, whether the property is rented office space or equipment used in the manufacture and distribution of goods.
  • Employees soliciting and accepting orders in Maryland.
  • Installation or assembly of the corporation's product.
  • Maintaining a stock of inventory in a public warehouse or placement of the corporation's inventory in the hands of a distributor or other non-employee representative.
  • Sales persons making collections on regular or delinquent accounts.
  • Technical assistance and training with Maryland offered by corporate personnel to purchasers or users of corporate products after the sale.
  • Corporate personnel repairing or replacing faulty or damaged goods.
  • Mobile stores in Maryland (such as trucks with driver-salesmen) from which direct sales are made.
For more information, see Administrative Release No. 2, Interstate Commerce Tax Act - Domestic and Foreign Corporations - Nexus Requirements - Apportionment of Corporate Net Income

Updated November 25, 2019

Maryland Law and Regulation on Out of State Vendors

Under Maryland law, a person who engages in the business of an out-of-state vendor must register with the Maryland Comptroller, collect and pay sales and use tax, and file Maryland sales and use tax returns. A person engages in the business of an out-of-state vendor if the person:

  1. 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;
  2. 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;
  3. Enters the state on a regular basis to provide service or repair for tangible personal property;
  4. Regularly uses the person's vehicles to sell or deliver tangible personal property or a taxable service for use in the State; or
  5. Sells tangible personal property or taxable services for delivery in the State, if, during the previous calendar year or the current calendar year, the person satisfies either of the following criteria:
    1. The person's gross revenue from the sale of tangible personal property or taxable services delivered in the State exceeds $100,000; or
    2. The person sold tangible personal property or taxable services for delivery into the State in 200 or more separate transactions.

See Md. Code Ann., Tax-Gen. §§ 11-701(b)(2)(i)-(b)(2)(iii) and COMAR 03.06.01.33(B)(4)-(5).

Engaging in the Business of an Out-of-State Vendor

The Comptroller's Office interprets Section 11-701(b) as broadly as is permitted under the United States Constitution.

The Comptroller considers the phrase "on a regular basis" as used in § 11-701(b)(2)(ii) to be met if a vendor, such as a furniture or appliance dealer, provides such service or repair as a customary, usual or normal course of business.

Section 11-701(b)(2)(ii) does not define the word "service" in the phrase "provide service or repair for tangible personal property." The Comptroller's Office, relying on a dictionary definition of "service," interprets the word to mean "installation, maintenance, or repairs provided or guaranteed by a dealer or manufacturer." See, for example, the American Heritage Dictionary, Second College Edition (1985).

A dealer or manufacturer that regularly installs, or who performs maintenance for, tangible personal property such as furniture or appliances is engaged in the business of an out-of-state vendor within the meaning of Section 11-701(b)(2)(iii).

No minimum number of service or repair visits is required to meet the definition. If it is the vendor's policy to provide service or repair for tangible personal property, and the vendor in fact provides such services or repairs during the audit period, these services or repairs will be regarded as regular. On the other hand, any services or repairs that are provided on a discretionary and infrequent basis will not be regarded as regular.

The Comptroller's Office will examine all relevant information in making a determination about whether a person engages in the business of an out-of-state vendor under § 11-701(b)(1-4). This information includes advertising materials, promotional literature, websites, representations made to prospective customers before sale, whether the vendor routinely employs service or repair personnel or regularly contracts for such services or repairs, and the vendor's description of its business operations as contained in business documents and submissions to government agencies.

Sales of Tangible Personal Property or Taxable Services for Delivery into Maryland

The nexus requirements contained in COMAR 03.06.01.33(B)(5) became effective October 1, 2018. Out-of-state vendors with more than $100,000 in sales or at least 200 separate transactions into Maryland must register and collect sales tax. The Comptroller's Office has published guidance for out-of-state vendors to determine if registration is required.

Guidance on Sales of Tangible Personal Property or Taxable Services for Delivery into Maryland

Sales and Use Tax Alert - Issued September 2018

Registration

If you are required to register with the Maryland Comptroller's Office, a Maryland Combined Registration Application can be found here.

One-Time Events or Shows

If you are going to participate in a one-time event or craft show involving the sale of tangible personal property in Maryland, you may not need to register with Maryland. However, you will need to obtain a Temporary Sales & Use Tax License. Information on obtaining a Temporary Sales & Use Tax License can be found here.

Closing a Sales and Use Tax Account

If you have determined that you no longer have nexus with the State of Maryland, are not required to file Maryland sales and use tax returns, and do not need to retain your account to claim a resale exemption, you can close your Maryland sales and use tax account by filing the Maryland Sales and Use Tax Final Return Form. Form 202FR is available here.

Contact Us

If you have any questions on Maryland's law and regulations on out-of-state vendors, please contact the Comptroller's Office at remotesellers@marylandtaxes.gov.

If the organization has a location in Washington, D.C, Virginia, West Virginia, Pennsylvania, or Delaware, it may qualify for an exemption. You should complete the Sales and Use Tax Exemption Certificate Application and submit it to the Maryland Comptroller's Office for consideration.
Yes. Under the Maryland sales and use tax law, each rental or lease payment is treated as a sale and is subject to the 6 percent tax rate. An 11½ percent tax is imposed on short-term passenger car and recreational vehicle rentals, while certain short-term truck rentals are subject to an 8 percent tax.
A resale certificate is a statement you produce and give to your supplier, stating that the merchandise you are purchasing is going to be resold or will become a part of a product that will be resold. To provide this statement, you must have a valid sales and use tax license. Although there is no specific form for a resale certificate, it must include a signed statement that the purchase is intended for resale, the purchaser's name and address, and the purchaser's Maryland sales and use tax license number. See a sample resale certificate. For more information, see Purchases for Resale or Business tax Tip #4, If You Make Purchases for Resale.
Yes and no. If you are purchasing materials that will be incorporated into the realty of a federal, state, or local government agency, you are not entitled to an exemption from the sales and use tax. You should pay the tax to your suppliers at the time of purchase. However, if you are purchasing merchandise for resale in its original form to a governmental entity, you may obtain a sales and use tax license that will enable you to issue resale certificates to your vendors. Equipment and tools purchased for your use in fulfilling a contract is taxable even if ownership will pass to the governmental entity after use. For more information, see Business Tax Tip #18, Real Property Contractors and Maryland Taxes.
If you are making purchases of products for resale as tangible personal property or incorporation into a product that will be sold as tangible personal property, you are required to obtain a sales and use tax license for the collection and remittance of the sales tax. The license authorizes a person to issue resale certificates to vendors containing the purchaser's sales and use tax account number. For more information, see Business Tax Tip #4, If You Make Purchases for Resale.
The 2007 Special Session of the Maryland General Assembly enacted legislation providing for two tax-free periods beginning each year. Listed below is information pertaining to each tax-free period.

Shop Maryland- Tax-Free Week on Clothing and Footwear, Excluding Accessory Items

Beginning in calendar year 2010 and each year thereafter, there will be a one week tax-free period for back-to-school shopping in Maryland during August in which the sales and use tax does not apply to the sale of any items of clothing or footwear, excluding accessory items, if the taxable price of the item of clothing or footwear is $100 or less. The 2016 tax free period will occur the week of August 14-20. Accessory items that are not exempt from the sales and use tax during the tax-free week include jewelry, watches, watchbands, handbags, handkerchiefs, umbrellas, scarves, ties, headbands, and belt buckles.

Shop Maryland- Tax-Free Weekend on Energy Star Products

Beginning in calendar year 2011 and each year thereafter, there will be a tax-free three-day weekend during February in which the sales and use tax will not apply to the sale of any Energy Star Product listed below. The 2017 tax free weekend will occur the weekend of February 18-20. Energy Star Product means an air conditioner, clothes washer or dryer, furnace, heat pump, standard size refrigerator, compact fluorescent light bulb, light-emitting diode (LED) light bulbs, dehumidifier, programmable thermostat or boiler that has been designated as meeting or exceeding the applicable Energy Star efficiency requirements developed by the U.S. Environmental Protection Agency and the U.S. Department of Energy. Please note that under Energy Star requirements, no dryer has an Energy Star rating and therefore dryers do not currently qualify for this tax-free period.

For more details, see our Sales and Use Tax Alert on Tax-Free Periods.
The church or organization is required to produce a copy of its exemption certificate issued by the Comptroller's Office. You should make a note of the exemption number and its expiration date on your copy of the invoice. You may not accept an exemption certificate issued by another jurisdiction as evidence that the church or organization is exempt in Maryland. You may also verify the validity of an exemption number online. For more information, see Business Tax Tip #6, Retail Sales Involving Exemption Certificates.
When purchasing manufacturing machinery and equipment, you need only provide the seller with a certification letter that the equipment will be used predominantly in a production activity. The certification should be retained by the seller with the record of sale. Items purchased which are consumed during the manufacturing process may be purchased tax free by issuing vendors a resale certificate. Manufacturers claiming exemption on the purchase of utilities to run the exempt equipment must complete Form ST 206. You can also obtain Form ST 206 by contacting the Comptroller's Taxpayer Service Division at 410-260-7980, or toll-free 1-800-638-2937 from elsewhere in Maryland, Monday - Friday, 8:00 a.m. - 5:00 p.m. EDT.
Yes. Effective January 3, 2008, as a vendor, you may assume and absorb all or any part of the sales and use tax on a retail sale and pay that tax on behalf of the buyer. You must, however, continue to separately state the tax from the sales price at the time of sale to the purchaser. If you absorb all or any part of the tax on the sale, you must pay the tax with the return that covers the period in which you made the sale.
To change the name of your business, you must first report the change to the Maryland Department of Assessments and Taxation. (SDAT) link to by submitting a completed Trade Name Amendment or Cancellation Form with SDAT.

Next, send us a letter or e-mail confirming the new business name and attach a copy of your completed Trade Name Amendment, Cancellation Form or Amended Articles of Incorporation.

Please include the following in your correspondence:

  • Former business name
  • New business name
  • Business address and telephone number
  • Nine-digit federal employer identification number (FEIN) or eight-digit Maryland central registration number


You can contact us by e-mail at taxhelp@marylandtaxes.gov or write to:

Comptroller of Maryland
Revenue Administration Center
Taxpayer Identification
Annapolis, Maryland 21411

To report other business-related changes with SDAT, see SDAT's Forms and Applications

You need to submit a completed Combined Registration Application. You can either download the paper version or register online. You can use this application to register the following business tax accounts:

  • Admissions and amusement tax account
  • Income tax withholding account
  • Sales and use tax license
  • Use tax account
  • Tire recycling fee
  • Transient vendor license
  • Unemployment insurance account

You must have a federal identification number before you can register your business, unless you are only applying for a sales and use tax license. To apply for a federal identification number, visit the IRS Web site.

You need to download the paper version to apply for the following:

  • Alcohol tax license
  • Tobacco tax license
  • Motor fuel tax account
  • Sales and use tax exemption

Yes. You can file and pay employer withholding taxes and sales and use taxes online for free using bFile. Electronic filing for businesses is fast, safe and easy. You can pay by direct debit and schedule debit payments up to the due date of the return.

The Electronic funds transfer (EFT) program is another easy way to file reports and remit taxes. You must first register by completing Form EFT-1, Authorization Agreement for Electronic Funds Transfer.

You can obtain the registration form and more information by calling Taxpayer Service at 410-260-7980, or 1-800-MD TAXES. 



You are required to fill out a MW506 form on an accelerated,  monthly, quarterly, seasonal or annual basis, depending upon the amount of tax withheld. You must file your MW506 form by the due dates, even if no tax was withheld. If no tax is due, file by telephone by calling 410-260-7225. See Filing Withholding Reports for more information about filing withholding reports, due dates, and filing frequency.

You can obtain preprinted coupons by calling our Taxpayer Service Division at 410-260-7980 from Central Maryland or toll-free 1-800-MD TAXES (1-800-638-2937) from elsewhere, Monday - Friday, 8:30 a.m. - 4:30 p.m. Please have your account number available when you call.

Yes. We can send you a confirmation letter if you call us at 410-260-7980 from Central Maryland or toll-free 1-800-638-2937 from elsewhere.

When you call, please provide us with the following information:

  • account number
  • name of company
  • your name and telephone number

No. You are not required by law to withhold; however, you may withhold as a courtesy to the employee. If taxes are not withheld, then the employee will need to make estimated tax payments. For more information see Taxable Wages.

Call our telefile line at 410-260-7225 or contact Taxpayer Service at 410-260-7980 or 1-800-638-2937 from elsewhere. Please be ready to provide:

  • the account number
  • type of tax (employer withholding, sales and use)
  • ending date of the report period

You will receive a confirmation number when you call the telefile line. However, our representatives staffing the Taxpayer Service line cannot provide confirmation numbers.

Use Form MW508 to reconcile the W2 and 1099 data filed on paper forms.

For magnetic media filers, the reconciliation information is contained in the new "RE" record, which includes all fields from Maryland Form MW508.

To obtain Form MW508, e-mail us at taxhelp@marylandtaxes.gov. You can also request the form by calling 410-260-7980 from Central Maryland or toll-free 1-800-MD TAXES (1-800-638-2937) from elsewhere, Monday - Friday, 8:00 a.m. - 5:00 p.m.

Usually this is because of a missing report. The upper left-hand corner of the notice will show the period of the missing report with a date.

You must continue to file a return, whether or not you are withholding any income tax, until you give us written notice that you no longer have employees or no longer are liable to file the return.



You should show on your report (MW506) the proper amount of tax withheld. Send in the difference between the amount withheld and the amount of the credit. Please do not use the credit unless you have a notice from our office showing the credit.

You must request in writing that you would like to receive a refund of the credit. The request must contain an explanation of how the credit occurred.

You can close your withholding account by calling Taxpayer Service at 410-260-7980 or 1-800-638-2937 from elsewhere in Maryland, Monday - Friday, 8:30 a.m. - 4:30 p.m.

Please be ready to provide your

  • Name
  • Telephone number
  • Federal Employer Identification Number (FEIN)
  • Central Registration Number (CRN)
  • Reason for closing the account (out of business, no employees, etc.),
  • Closing date

You can also close your account by completing and remitting both the Final Return Form MW506FR available in your withholding coupon booklet along with your final return.  Both forms can be located in your coupon books or on the business tax forms page.

Employers having 25 or more W-2 wage statements to report are required by Maryland to file their annual reports on magnetic media or electronically by using our online b-File application. b-File allows you to key in up to 250 W-2s and the MW508 year-end reconciliation form.

Employers with less than 25 may elect to file paper returns. However, we encourage all employers to file with magnetic media or electronically since it saves time and processing costs.

For more information, see Year-End Reconciliation Requirements. or contact us by phone at 410-260-7150 or by e-mail at efil@marylandtaxes.gov.

To change the name of your business, you must first report the change to the Maryland Department of Assessments and Taxation. (SDAT) by submitting a completed Trade Name Amendment or Cancellation Form with SDAT.

Next, send us a letter or e-mail confirming the new business name and attach a copy of your completed Trade Name Amendment, Cancellation Form or Amended Articles of Incorporation.

Please include the following in your correspondence:

  • Former business name.
  • New business name.
  • Business address and telephone number.
  • Nine-digit federal employer identification number (FEIN) or eight-digit Maryland central registration number.

You can contact us by e-mail at taxhelp@marylandtaxes.gov or write to:

Comptroller of Maryland
Revenue Administration Center
Taxpayer Service Division
Annapolis, Maryland 21411

To report other business-related changes with SDAT, see SDAT's Forms and Applications

Below you will find frequently asked questions concerning the Sales and Use tax.

Yes. Every time you purchase taxable tangible goods, whether in person, over the phone, or on the Internet, the purchase is subject to Maryland's 6 percent sales and use tax if you use the merchandise in Maryland. If you make a tax-free purchase out of state and need to pay Maryland's 6 percent use tax, you should file the Consumer Use Tax Return.

When you purchase goods from out-of-state businesses, they are not required to collect Maryland's sales and use tax unless they have a physical location, or deliver services, in Maryland. For more information, see Maryland's Sales and Use Tax

No. A store coupon is not included in the taxable price unless the vendor can get reimbursement from another source. Manufacturers' coupons are included in the taxable price since a store can obtain a reimbursement from the manufacturer.

For example, if you had a Mars grocery store coupon that was redeemable only at a Mars store - and not Food Lion, Giant or any other food store - the coupon would not be included in the taxable price. On the other hand, if you had a Welch's Grape Juice coupon that you could use in any store, then that coupon would be included in the taxable price.

No. Energy Star-rated clothes washers, refrigerators and air conditioners sold in Maryland are not exempt from the Maryland sales and use tax.

There is a tax-free three-day weekend during which the state sales tax will not apply to the sale of any Energy Star Product listed below, or solar water heater. The tax-free weekend for 2013 will occur the weekend of February 16, 2013, through February 18, 2013.

Energy Star Product means an air conditioner, clothes washer or dryer, furnace, heat pump, standard size refrigerator, compact fluorescent light bulb, dehumidifier, or programmable thermostat that has been designated as meeting or exceeding the applicable Energy Star Efficiency requirements developed by the U.S. Environmental Protection Agency and the U.S. Department of Energy.

In general, food sales are subject to Maryland's 6 percent sales and use tax unless a person operating a substantial grocery or market business sells the food for consumption off the premises and the food is not a taxable prepared food. A grocery or market business is considered to be "substantial" if the sales of grocery or market food items total at least 10 percent of all food sales.

For more information, see Sales of Food

No. The Maryland sales and use tax does not apply to the sales of cars or boats since those items are already subject to titling taxes. Sales of motor vehicles are subject to the Maryland motor vehicle titling tax which is administered by the Maryland Motor Vehicle Administration. Boat sales are subject to a boat titling tax which is administered by the Maryland Department of Natural Resources. On the other hand, the sales and use tax does apply to car and boat rentals, under different tax rates. An 11.5 percent tax is imposed on short-term passenger car and recreational vehicle rentals. Certain short-term truck rentals are subject to an 8 percent tax.

It depends. Charges for warranties, maintenance, service agreements and insurance are taxable if the buyer is required to purchase them or they are already included in the price of the merchandise. However, if the sale could be completed without paying these charges, then the charges are not taxable.

Private vendors or franchisees selling on military bases, or other United States Government properties, must charge the sales tax on all sales of tangible personal property and taxable services statutorily subject to the tax. The tax must be charged on sales to military and other Government personnel as well as civilians. There is an exemption from the tax for sales made at a vending machine facility operated under the Maryland Vending Program for the Blind that is located on property on military bases.

Sales made by the United States Government, or any of its agencies, on Government property are exempt from the sales and use tax, regardless of whether the purchasers are military and Government personnel or civilians.

For example, sales of food by a fast food vendor on a military base are subject to the tax if the vendor or franchisee is ABC Company. The same sales made on a military base where the vendor or franchisee is the United States Government, or an agency of the Government, are not subject to the tax.

Basically, yes. Maryland does, however, grant a credit for the sales tax paid to another state up to the amount of the Maryland tax. In addition, a 10 percent depreciation allowance may be taken for each full year the property is used by the purchaser before being brought to Maryland.

Maryland grants a credit for sales tax paid to another state up to the amount of Maryland's six (6%) percent sales and use tax liability.

For example, if you paid a four (4%) percent sales tax to another state, you would be liable only for the difference, or two (2%) percent Maryland sales and use tax when you brought the property into Maryland. If you paid a six (6) or higher percent sales tax to another state, you would not be liable for Maryland sales and use tax when you brought the property into Maryland.

Yes. However, you may claim a ten (10%) percent depreciation allowance for each full year you used the property before you brought it to Maryland. Only the depreciated value is subject to tax.

The tax applies only to the cost of materials and purchased fabrication services, not to the full market value of the goods. The value of your labor is not taxed.

Yes. Maryland law requires that vendors display their licenses at any location where sales are made. This will save you valuable selling time because representatives of the Comptroller's Office do not have to ask for your registration number.

The tax is on the transaction or sale and not on the property sold. The same item will generate tax each time it is sold unless it is specifically sold for resale.

Yes. Nonprofit organizations must collect tax on merchandise they sell, even if the goods are donated to them. Private individuals must also collect tax even if they plan to donate the proceeds to a nonprofit organization. Private individuals are not eligible for a sales and use tax exemption certificate. Sales by religious organizations and sales of food by volunteer fire companies and veterans' organizations are exempt.

Always collect tax on sales to other dealers unless they present you with a resale certificate bearing their Maryland sales tax registration number. However, out-of-state dealers who are not required to collect the Maryland tax may use their out-of-state sales tax registration number on a resale certificate to purchase antiques and used collectibles. Dealers from states that do not impose a sales tax may provide a valid trader's license or comparable document. Resale certificates are not valid for cash, check or credit card sales of less than $200 unless the product is delivered to the customer's place of business.

Yes. Effective January 3, 2008, a vendor may assume and absorb all or any part of the sales and use tax on a retail sale and pay that tax on behalf of the buyer. The vendor must, however, continue to separately state the tax from the sales price at the time of sale to the purchaser. If the vendor absorbs all or any part of the tax on the sale, the vendor shall pay the tax with the return that covers the period in which the vendor makes the sale.

Yes. However, when calculating if a business meets the 10 percent threshold for a substantial grocery or market business, you may not include sales of single servings, heated or prepared food or sales to be consumed on the premises.

Yes. A caterer serving food at a customer's premises must collect the tax on the food sold. A caterer must collect the tax in this situation even if the caterer also conducts a substantial grocery or market business.

Yes. Sales of food to patients in a hospital when the food charges are included in the regular room rate are exempt. Sales of food and beverages on vehicles operating in interstate commerce are exempt. In addition, the tax does not apply to a sale of crabs for consumption off the premises where sold. Sales of seafood to be consumed off the premises where sold are also exempt if the seafood is not prepared for immediate consumption.

No. For sales and use tax purposes, soft drinks, bottled water, alcoholic beverages, candy and confectionery are not "food." The sale of any of these items is, therefore, not entitled to any of the exemptions for sales of food, including the exemptions for sales of food by volunteer fire companies and veterans organizations. Neither water nor ice is food, although they may be treated as food when sold as components of food.

The tax does not apply to eligible food purchased with federal food stamps. Food stamp eligible food encompasses everything that is considered food for sales and use tax purposes, plus soft drinks, candy, confectionery, water, ice and otherwise taxable and prepared foods.

If a customer purchases both taxable and nontaxable food stamp eligible food with a combination of food stamps and cash, credit card or debit card, the vendor must apply the food stamps to the eligible taxable items first, and then any remaining food stamps to the eligible nontaxable items. After application of the food stamps, the balance of the eligible taxable items paid for with cash, credit card, or debit card is subject to tax.

Unlike sales of other types of tangible personal property and taxable services that are taxed at a 6% rate, the sales and use tax is imposed at a 9% rate on the taxable price of alcoholic beverages. The 9% rate on sales of alcoholic beverages replaces the 6% rate and is not in addition to that rate.

The 9% rate is effective for sales on and after July 1, 2011.

Licensed retailers can apply for a special Retail Off-Site Permit from the Comptroller's Office to sell wine produced by a Class 4 limited winery at a Farmer's Market listed with the Maryland Department of Agriculture. The permit must be issued to a licensed retailer authorized to sell alcoholic beverages for consumption off-premises, and whose license was issued by the local licensing board in the jurisdiction in which the Farmer's Market will be held.

Yes, retail receipts should be kept for two years or until audited. See Alcoholic Beverages Article 1-408.

State regulations do not require Catered Event Certificates to be kept for a certain length of time. A revolving calendar year should suffice. Check the regulations issued by your county liquor board.

Yes. Catering food requires a license from the county.

Yes. An alcohol catering license is needed if you plan to furnish alcoholic beverages. It is known as a Statewide Caterer (SCAT) License. See COMAR 03.02.01.18.

They are issued by the County Liquor Boards.

This information is available in the Comptroller's alcohol and tobacco tax annual reports.

Yes, you must obtain a $50 Non-Beverage Class C Permit. See Tax General TG 2-101(c).

Yes, a Non-Beverage Class E Permit is required. However, there is no fee.

"Happy hour" is regulated by each county's liquor board.

Price filing is no longer required for any form of alcohol. Brand registration is required for beer only.

A wholesaler pays the tax if the beer is imported from another country. An out-of-state non-resident dealer (a.k.a. supplier) pays the tax if the beer is purchased by a Maryland wholesaler. See Tax General TG 5-102 and TG 5-105.

Beer: A beer manufacturer cannot require participation, but participation by the wholesaler is legal for beer. A manufacturer can charge the wholesaler extra for advertising their product, but they cannot make them pay it. See Alcoholic Beverages Article 5-104.

Wine and Distilled Spirits: These manufacturers cannot charge extra for advertising.

It is a system whereby alcohol is sold from the supplier to the wholesaler, from the wholesaler to the retailer, and from the retailer to the consumer.

The legislature enacts statutes. The Comptroller adopts, amends and repeals regulations under the authority granted by statutes, following the procedures in the Administrative Procedure Act.

Contact the General Accounting Division at 410-260-7813.

Business liability: 410-767-1908
Personal liability: 410-649-0633 (usually an income tax issue)
Personal property tax: Clerk of the Circuit Court (in the respective county)

IRS individual tax questions: 1-800-829-1040
IRS business tax questions: 1-800-829-4933
Web site: www.irs.gov

No. By statute, the 6% sales and use tax is imposed on a bracketed basis. The amount of tax due is determined by the sale price in relation to the statutorily imposed brackets. The amount of tax increases one cent from one bracket to the next with 6 cents due on each exact dollar. The 9% sales and use tax is a flat rate. This means that when the tax calculation results in an amount between two whole pennies, the tax is rounded off. The tax computation must be carried to the third decimal place, and the tax then must be rounded to a whole cent using a method that rounds up to the next cent whenever the third decimal place is greater than four, and rounds down whenever the third decimal place is less than or equal to four. For example, if the taxable price of the alcoholic beverage is $8.24 the tax would be $0.74 ($8.24 times 9% = $0.742). If the taxable price of the alcoholic beverage is $8.29 the tax would be $0.75 ($8.29 times 9% = $0.746).

You must report the tax you charged on sales of alcoholic beverages separately from the tax imposed on sales of other items. Effective July 2011, the sales and use tax return will include separate lines for tax imposed on sales at the 6% rate and tax imposed on sales at the 9% rate. The revised sales and use tax return will also have separate lines for reporting tax on purchases at each rate as well.

No. As of August 1, 2013, EFT ACH is no longer an option for reporting or submitting sales and use tax payments.

Taxpayers required to pay with immediately available funds can pay using direct debit by electronically filing for free via bFile; or can pay using a credit card by going online or by calling 1-800-2PAY-TAX (1-800-272-9829). If you are new to bFile, please verify that your financial institution will accept debit transactions.

The 9% rate applies to sales of alcoholic beverages as defined in Tax-General Article §5-101(b). This includes sales of beer, distilled spirits, and wine, as well as any beverage or cocktail that may contain a mixture of both alcoholic and non-alcoholic components, including an alcoholic mixed drink, a frozen alcoholic cocktail, an alcoholic coffee drink, and a gelatin shot containing an alcoholic beverage.

Yes. Only products that are fit for beverage purposes and contain one-half of 1% or more of alcohol by volume are subject to the 9% rate. Other products, such as cooking wine and cooking sherry, as well as vanilla and rum extracts and similar items, are not subject to the 9% tax as they are not intended for beverage purposes. There are many personal care products and cleaning products that contain alcohol as well; however, these items are not included in the definition of alcoholic beverage and therefore are not subject to tax at the 9% rate.

If you buy a mixed drink that contains both alcoholic and non-alcoholic components, the sale of that beverage will be subject to tax at the 9% rate. However, the 9% tax does not apply to the sale of a bottle of grenadine or similar flavoring or mixer on its own that does not contain one-half of 1% or more of alcohol by volume. Those sales are taxed at the 6% rate unless otherwise exempt.

Effect on sales by exempt organizations:
Sales of alcoholic beverages made by specific types of organizations listed in Tax General Article §11-204(b) are also exempt from the 9% tax on alcoholic beverages.

Effect on purchases by exempt organizations:
Maryland sales and use tax exemptions apply to all purchases for use by the exempt organization, regardless of the applicable tax rate. Therefore, your organization's purchases of alcoholic beverages made to carry on the organization's work are exempt from the 9% tax on alcoholic beverages.

* You can access the Maryland Code, including Tax-General Article, online.

The tax must be separately calculated on sales of alcoholic beverages at the 9% rate and on sales of food, non-alcoholic beverages, and other merchandise at the 6% rate. The 9% tax amount must be listed separately from the 6% tax amount on the bill of sale.

For sales made between July 1, 2011 and June 30, 2012, if your sales include alcoholic beverages as well as other items, you must apportion the charge for the mandatory gratuity between the two categories. For example, if the total charge amounts to $300, and of that amount $200 is for sale of food and non-alcoholic beverages and $100 is for the sale of alcoholic beverages, then 2/3 of the amount of the gratuity is subject to the 6% tax rate and 1/3 is subject to the 9% tax rate. In this example, if the gratuity charged is $45, the 6% rate on the gratuity would be $1.80 (2/3 times $45 times 6% = $1.80) and the 9% rate on the gratuity would be $1.35 (1/3 times $45 times 9% = $1.35). The bill, therefore, would reflect total tax at 6% of $13.80 ($230 at 6%) and total tax at 9% of $10.35 ($115 at 9%).

Due to a 2012 law change, for sales made on and after July 1, 2012, charges for alcoholic beverages are subject to tax at the 9% rate and charges for mandatory gratuities are subject to the 6% rate regardless of whether the gratuities relate to sales of alcoholic beverages or sales of food and non-alcoholic beverages.

In order to be authorized to make direct wine shipments to Maryland residents, the law requires that the vendor be issued a direct wine shippers permit, and also requires that the vendor comply with existing tax laws, including the requirement to collect sales and use tax. Therefore, the vendor will be required to charge sales and use tax at the rate of 9% on sales of wine to Maryland residents. If the vendor imposes a separately stated shipping charge, that amount will not be subject to tax. However, if the shipping charge is not separately stated, or if the shipping charge includes a handling charge, whether that shipping and handling charge is separately stated or not, then the entire amount will be considered to be part of the taxable price of wine, and the 9% tax will apply to the whole charge for sales made prior to July 1, 2012.

For sales made on and after July 1, 2012, the 9% rate will apply to the charge for the wine, and the 6% rate will apply to any other separately stated taxable charge made in connection that the sale of the wine.

Yes. An inbound freight charge is part of taxable price. If the inbound freight charge is imposed on the sale of an alcoholic beverage, then the vendor must collect tax on the price that includes the inbound freight charge, whether separately stated or not.

For separately stated inbound freight charges on sales made prior to July 1, 2012, the 9% rate applies to all charges, and for sales made on and after that date, the 9% rate will apply to the charge for the alcoholic beverage, and the 6% rate will apply to the charge for inbound freight.

You may apportion the sales price between the alcoholic beverages and the other merchandise and charge the 9% sales and use tax on the taxable price of the alcoholic beverages and the 6% sales and use tax on the price of the other items. If the basket includes non-taxable merchandise as well, and you allocate the sales price among the three categories of merchandise (alcoholic beverages, taxable merchandise, non-taxable merchandise), then you may exclude the non-taxable items from the taxable price. However, if you charge a lump-sum price for the gift basket, and you do not apportion the sales price among the categories of items, you must collect the sales and use tax at the higher 9% rate on the entire price of the basket.

For sales made prior to July 1, 2012, itemized charges for equipment, supplies and labor that are directly and predominantly related to the sales of alcoholic beverages should be taxed at the 9% rate. Itemized charges for equipment, supplies and labor that are directly and predominantly related to the sales of food and non-alcoholic beverages should be taxed at the 6% rate.

For sales made on and after July 1, 2012, itemized charges for alcoholic beverages are subject to tax at the 9% rate and all other charges are subject to tax at the 6% rate.

If you do not itemize your bill in the manner discussed in Question 15 and instead elect to bill a lump-sum price for the entire bill or per-person charge, you must charge the higher 9% tax rate on the entire bill.

Alcoholic beverage sales for specific events for which contracts are fully executed prior to July 1, 2011 are subject to the 6% sales and use tax. Alcoholic beverage sales for specific events for which contracts are signed and executed on or after July 1, 2011 are subject to the 9% sales and use tax.

If the contract for the specific event is fully executed before July 1, 2011 and contains all material terms such as price, quantities, selections of food and beverages (alcoholic and non-alcoholic), and the names of the parties to the contract, the tax rate on the taxable price of alcoholic beverages is 6%.

If the contract for the specific event is fully executed on or after July 1, 2011, but prior to July 1, 2012, and it contains all material terms, such as price, quantities, selections of food and beverages (alcoholic and non-alcoholic), and the names of the parties to the contract, then the tax rate on the taxable price of alcoholic beverages is 9%.

If the contract for the specific event is fully executed on or after July 1, 2012, and contains all material terms such as price, quantities, selections of food and beverages (alcoholic and non-alcoholic), and the names of the parties to the contract, then the tax rate on the charge for the alcoholic beverages is 9% and the tax rate on all other charges is 6%.

The tax, whether at the rate of 6% or 9%, must be charged by the caterer at the time the contract is executed. The caterer must then report and pay the tax to the Comptroller by the required due date.

You must apportion your sales price between the taxable price of the alcoholic beverages and the taxable price of the food and non-alcoholic beverages and charge the tax accordingly. If you do not separately state the charges subject to the different rates, you must charge the higher 9% rate on the entire charge to the customer.

The cost of the meal and any other related taxable charges will be taxed at the 6% rate. You must pay the 9% sales and use tax rate on your purchase of any alcoholic beverages that are provided to customers at no charge.

That depends. If you pay a sales tax to the vendor in the state where you made the purchase and the rate of that tax is equal to or greater than the 9% rate, then you will not owe any additional tax when you bring the item into Maryland. However, if you are not charged a sales tax on your purchase, or if the amount of tax you pay is less than 9%, you will owe Maryland tax on the difference between the rate you paid to the other state and the 9% Maryland rate. You should also be aware that if you bring alcohol in excess of the quantity limitations specified in Tax-General Article §5-104(c) you will also owe the alcoholic beverage tax in addition to the sales and use tax.

For sales prior to July 1, 2012, you must charge the 9% sales and use tax on the sale of the beer and on any rental charge that you impose on the lease of the keg and related equipment. The deposit is not subject to sales and use tax. However, if the equipment is not returned and you retain the deposit as payment for the equipment, the deposit will be considered to be part of the taxable price of the alcoholic beverage and is then subject to the 9% sales and use tax.

For sales made on or after July 1, 2012, only the charge for the beer is subject to the 9% rate. Separately stated charges for rental of equipment are taxed at the 6% rate. If the equipment is not returned and you retain the deposit as payment for the equipment, the deposit will be considered to be the charge for the equipment and will be subject to tax at the 6% rate.

Because a sale that is subject to both sales and use tax and admissions and amusement tax is capped at 11%, you must charge the 9% sales and use tax on the sale of the alcoholic beverages, and apply the admissions and amusement tax to the gross receipts from the sale of alcoholic beverages at a rate no higher than 2%, even if the jurisdiction normally imposes a higher rate. Your gross receipts from sales of food and non-alcoholic beverages that are taxed at a 6% sales and use tax rate are subject to admissions and amusement tax at a rate no higher than 5% due to the cap.

This will depend on whether the charge for entry is truly an "admission" charge as opposed to being a charge for the sale of the wine. If you are allowed entry to the venue without payment of any charge, and the only payment collected is from those who participate in the tastings, then the charge will be considered to be a sale of an alcoholic beverage and the 9% sales and use tax will apply. On the other hand, if everyone has to pay the admission in order to gain entry into the venue, regardless of whether they participate in the tastings or not, then the sales and use tax does not apply to the sale of admission tickets. However, depending on the jurisdiction, the gross receipts from the sale of the tickets may be subject to the admissions and amusements tax. In this case, the entities that are providing the wine tastings are considered to be the consumer of the products, and must pay the 9% tax on the cost of the wine.

The refillable containers (growlers) are tangible personal property and are subject to the 6% sales tax rate. The contents of the growler are subject to the 9% tax rate. If the customer is not purchasing the growler, there is no sales tax on a previously purchased refillable container. However, the 9% tax rate applies to the purchase of each refill of an alcoholic beverage.

You are considered to be the consumer of the food and drinks that you provide and you must pay any applicable sales and use tax on your cost of the food and beverage. You must pay the 9% sales and use tax on your purchase of any alcoholic beverages that are provided to customers at no charge. The gross receipts on your ticket sales may be subject to the admissions and amusement tax depending on where you are located.

Your sales and use tax registration number is an eight-digit number that has been assigned to your business. You'll find your registration number on each sales and use tax return we send you and on your sales and use tax license.

You must clearly document the reason for all tax-exempt sales. Otherwise you will be held responsible for uncollected tax, plus penalty and interest. You should establish procedures to obtain valid resale certificates at the point of sale, and review your files periodically for accuracy and completeness.

Make certain that you do not allow resale exclusions on cash, check or credit card sales of less than $200 when you do not deliver the goods sold directly to the buyer's retail place of business.

You should keep resale certificates on file as part of your business records. You must be able to match your sales records with the appropriate resale certificates for audit purposes.

No. Retailers licensed and remitting taxes in other states may apply to the Maryland Comptroller's Office for a refund.

However, an out-of-state vendor who has been issued a temporary permit to collect the Maryland tax may use the number on that permit to make tax-free purchases for resale at the show for which the permit was issued. Temporary permits bear six-digit numbers and are issued by the comptroller's Special Events Section.

No. If you frequently deal with the same supplier, you may provide that supplier with a blanket resale certificate stating that all purchases are for resale. Then all you have to do is give the supplier your sales and use tax registration number.

No. Exemption certificates are issued by the Comptroller of Maryland to qualifying nonprofit organizations and government agencies to make purchases for their own use. The exemption certificate is a wallet-sized card bearing the holder's eight-digit exemption number. Certificates issued to nonprofit organizations have a specific expiration date, presently September 30, 2017 for religious, educational and charitable organizations, cemeteries, credit unions, and volunteer fire companies or rescue squads and September 30, 2017 for certain veterans organizations and their auxiliaries and units. Certificates issued to government agencies have no expiration date. Organizations and government agencies presenting exemption certificates are exempt from the sales and use tax on purchases of materials and supplies to carry out their work. On the other hand, a resale certificate allows a person to make tax-free purchases for resale, not for use.

Although there is no specific form for a resale certificate, it must include a signed statement that the purchase is intended for resale, the purchaser's name and address, and the purchaser's Maryland sales and use tax registration number.

In a typical transaction, you would sell merchandise to a vendor who is not registered to collect Maryland sales and use tax. The unregistered vendor asks you to deliver the merchandise to a customer in Maryland. In this case, you must:

  • Require the vendor to obtain a Maryland sales and use tax license and provide a valid resale certificate; OR
  • Charge the vendor the tax based on the amount of the sale. You are responsible for collecting or documenting the tax on your sale to the vendor.

Does the state impose bad check charges?
Yes. In addition to all other charges described above, a $30 service charge is applied to dishonored checks.

Can payment due me from the state be used to offset my tax liability?
Yes. Any money the state owes you for goods or services or as a personal or corporation income tax refund will be applied to unpaid tax balances or held pending the filing of missing returns.

Can taxes be avoided through bankruptcy proceedings?
State trust fund taxes (sales and use tax and employee withholding tax) are not discharged in bankruptcy. If a bankrupt business does not have enough assets to pay state taxes, the owners and specified corporate officers are personally responsible for the taxes.

When you sign the direct debit authorization document, you agree to have a predetermined amount deducted from your checking account on approximately the same day or days each month until your debt is cleared. The money will be transferred to the state of Maryland.

Can I pay the balance in a lump sum midway through the payment plan?
Yes. Please contact our office to determine the correct payoff figure and to cancel your direct debit at least 5 days prior to the scheduled withdrawal. If the request to cancel the scheduled withdrawal is not received at least 5 days prior to the scheduled withdrawal, we may be unable to prevent the extraction of that payment.

Will the State be authorized to debit my account for any other amounts or liabilities during the payment period I've agreed to?
No, the State will debit your account only for those amounts you agreed on in the direct debit authorization.

What happens if there are not enough funds in my bank account?
You will be subject to the customary charges relating to returned checks, and your direct debit arrangement may be voided.

Will I receive a notice prior to each debit payment?
No, but you will receive a regular statement of account indicating the direct debit payment that has been applied to your account for the period.

What if I change banks?
To make changes to your direct debit, please contact our office at least 5 days prior to the scheduled withdrawal. If the request to change the scheduled withdrawal is not received at least 5 days prior to the scheduled withdrawal, we may be unable to prevent the extraction of that payment. This may result in a returned check fee if your original bank is unable to honor the payment request.

What happens if my tax payment due date falls on a weekend or on a bank holiday?
The debit for your tax payment will be effective on the next banking day.

Is there anything I have to do each month to make this work?
Yes. You must make sure that sufficient funds are available in the proper bank account to cover the direct debit amount.

Where should I report name and address changes?
Please report any name or address changes to our Individual Income Tax Collection Unit by calling 410-974-2432. You may also email us at cdcollectionind@marylandtaxes.gov or write us at:

Comptroller of Maryland
Attention: Individual Income Tax Collection Unit
110 Carroll St.
Annapolis, MD 21411

No. Licenses should be issued only to those businesses that are required to be licensed by the state. Requesting an unnecessary license only creates extra paperwork and hampers timely service to businesses that need assistance. To determine if you need a license, contact your local Clerk of the Court or call the State License Bureau at 410-260-6240.

Businesses located in Maryland may need to obtain one or more of the following licenses from their local Clerk of the Court: auctioneer, billiard table, chain store, cigarette, commercial garage, console machine, construction firm, hawkers and peddlers, junk dealers, laundry, music box (juke box), pinball, plumber and gas fitter, restaurant, special cigarette, storage warehouse, trader's, trader's show, vending machine, wholesale dealer-farm machinery, electronic smoking devices retailer, and vane shop vendor.

No. The Trader's License requirement applies to both wholesale and retail businesses.

A trader's license applies to a trader or vendor in a fixed location. A trader's show license is designed for traders who rent space temporarily from a promoter and derive less than 10 percent of their gross annual income from show events.

Builders are required to obtain a construction license, in addition to any registration required under the Maryland Home Builder Registration Act. Construction companies building new homes or entering into contracts to sell new homes should contact the Home Builder Registration Unit of the Maryland Attorney General's Office at 410-576-6573.

Yes. They may be required to obtain a nonresident construction license, which entails a $60 fee in Baltimore City and a $50 fee in the 23 counties of Maryland.

The licensing requirements that affect auctioneers depend on whether the auctioneer is holding inventory or merely providing a service.

This form is an effective tool that allows the licensee to provide an inventory value which determines the price amount of the license and speeds up the issuing process. You can download the Declaration of Inventory Form or obtain a copy by contacting the State License Bureau at 410-260-6240.

The State License Bureau can answer questions, provide helpful brochures and offer other assistance in special cases. We can provide the Clerks of the Court access to important data, including information provided by the Maryland Department of Assessments and Taxation. We can also provide important data to local government finance officials, helping them to expedite license clearances. In addition, agents from the Comptroller's Field Enforcement Bureau can resolve cases involving bad checks issued to local governments. For more information, contact the State License Bureau at 410-260-6240.

No. A new owner is not liable for the delinquent licenses of a previous owner. Our law enforcement agents will pursue these delinquent matters with the previous owner.

The Clerk of the Court Office will notify the State License Bureau. Agents from the Field Enforcement Bureau will then contact the delinquent business and confiscate the business license, if necessary, to resolve the matter.

The statute of limitations for delinquent licenses is four years.

Any person who might have received a poor product or unsatisfactory service from a business should contact the Maryland Attorney General's Office Consumer Protection Division at 410-528-8662. Complaints can also be referred to the Better Business Bureau.

Trader's license fees are based on the average commercial inventory that a business owns. The fees increase as the inventory values increase. Currently, the fee amounts range from $15 to a maximum of $800 ($2,125 in Baltimore City).

The state and local agencies listed below must verify that an applicant renewing a license has paid all states taxes due - or made a satisfactory payment arrangement - before the license can be renewed:

  • Comptroller of Maryland
  • Clerks of the Circuit Court
  • Department of Labor, Licensing and Regulation
  • Department of Health and Mental Hygiene
  • Motor Vehicles Administration (excluding driver's licenses and vehicle registration renewals)
  • Department of Natural Resources
  • Department of the Environment

If you hold a license issued by one of these agencies, you should file any necessary tax returns and pay all taxes due without delay.  If you wait until license renewal time to resolve a tax liability, your renewal may be delayed.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

Legislation was passed during the 2007 special session of the Maryland General Assembly (Chapter 3 of the Acts of 2007), which was amended during the 2008 Session (Chapters 177 and 178 of the Acts of 2008), that requires some corporations to report certain information to the State of Maryland. The Comptroller's Office is required to collect, compile and analyze this information and to report to the Governor and the General Assembly the fiscal effect of implementing a combined reporting corporate income tax regime and several other corporate income tax changes, as well as other statistical information about Maryland's current corporate income tax.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

No. This requirement does not alter in any way your tax liability or the normal way you have been filing the corporate income tax return.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

Corporations required to file a Maryland income tax return that are members of corporate groups, defined as "an affiliated group or controlled group under §1504 or §1563 of the Internal Revenue Code" or an affiliated group, engaged in a unitary business, with more than 50% of the voting stock of each member owned by a common owner/owners or by one or more members of the group.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

Every entity meeting the criteria under "Who is required to file" is required to file the information report, whether or not you have received a Tax Alert from the Comptroller. If you have not received a Tax Alert and do not meet the above criteria, no action is required.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

If you are a single-entity company with no other company affiliations and have received the Comptroller's Tax Alert, you must to go to the Comptroller's website one time only and affirm that you do not have to file the information report. Single-entity companies are exempt from this reporting requirement.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

If you are a part of a unitary group and are required to file a Maryland corporate income tax return, information for your entity and related entities must be reported through the Comptroller's website.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

If your company existed during tax year 2006 or 2007 and met the criteria under "Who is required to file," information for that entity must be reported. If your company did not exist or did not meet those criteria and you have received the Comptroller's Tax Alert, you must to go to the Comptroller's website one time only and affirm that you do not have to file the information report.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

A homeowners' association may have received this alert if it files as a C-corporation. If there are no other affiliates that are part of a unitary group, the association must to go to the Comptroller's website one time only and affirm that it does not have to file the information report.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

The legislation that was enacted during the 2007 Special Session made reference to publicly traded corporations. However, during the regular session this past spring the definition of who is required to file was reworded as shown under "Who is required to file." There is no distinction between publicly-traded and private corporations.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

Yes. The reporting system will automatically indicate all of the entities of a unitary group that have been accounted for in one information report.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

The first year affirmation of not being required to file the information report stands only until you become subject to the reporting requirements.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

This capability is not available at this time.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

Yes. The penalty is $5,000 per day for the first 30 days following the due date of the report and $10,000 per day for each day after the first 30 days that the report has not been filed.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

The report will be submitted electronically, as required by law. The reporting system will be posted on the Comptroller's website.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

No, this is a study only. An abbreviated information "return" will be available on the Comptroller's website to be filled out and submitted directly from the website.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

Not at this time.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

Electronic submission of this information report is required by law. The reporting system will be posted on the Comptroller's website (see Reports) by September 2008.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

Yes. The information report can be submitted by FEIN as well as by the tracking number on the Tax Alert from the Comptroller.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

The information reports are required for tax years beginning after December 31, 2005 and before January 1, 2011.

The information reports for tax year 2006 (a tax year beginning after December 31, 2005 and before January 1, 2007) were required to be submitted on or before October 15, 2008.

The information reports for tax years 2007 through 2010 were required to be submitted on or before seven months after the original due date of the corporation's Maryland tax return for the corresponding tax year.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

No, the due date will not be extended. Under extenuating circumstances only, the Comptroller may consider waiving or abating penalties for failure to timely file the information report.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

All members of a corporate group that are in a unitary business and are:

i. Organized or incorporated in the United States, including those corporations qualifying for Puerto Rico and Possession Tax Credit as provided in IRC Section 936, or
ii. Corporations organized or incorporated outside of the United States whose business activity in the United States is 20% or more of the corporation's total business activity. Foreign corporations that conduct 20% or more of their business activity in the United States, as measured by the average of the property and payroll factors, must be included 100% in a water's edge combined report.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

A unitary business is a business in which the activities of the corporations comprising the business (whether related as a parent and subsidiary or as affiliated corporations related through common ownership) are economically interdependent as demonstrated by strong centralized management, functional integration, and attainment of operational economies of scale.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

Yes. The information provided will be used by the Comptroller to calculate the impact of certain potential changes to tax law. Even though some types of corporations do not use the standard double-weighted three-factor apportionment formula, all entities will be required to provide information allowing the Comptroller to calculate the effect of that apportionment. Keep in mind that this is an information report only; actual apportionment and tax liability are unchanged.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

Yes. There will be an entry to report sales of tangible personal property originating from Maryland to all states in which an entity does not have nexus for corporate income tax purposes.

For purposes of the study, total NOLs and NOLs prior to the start of the relevant tax year will be reported. The Comptroller anticipates that the study will include an analysis of allowing NOLs of one entity to be used for the entire group as well as limiting the use of NOLs to the entity that incurred them.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

There will be an eliminations entry to reflect all intercompany transactions.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

There will be a special deductions entry to report the amount from line 29B from the federal form 1120.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

If there are two short years representing a full, 12-month return, simply combine the information from the two short years and report as one year. Otherwise, report each short year separately.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

There will be separate entries for each entity that is included in the combination. The number of entities of a unitary group that can be included in a single report is unlimited.

This reporting requirement no longer exists for tax years beginning after December 31, 2010

Both. The information provided will be used by the Comptroller to calculate the impact of certain potential changes to tax law. Information for companies with and without nexus with Maryland must be reported if the companies are members of the unitary group.

Unlike sales of other types of tangible personal property and taxable services that are taxed at a 6% rate, the sales and use tax is imposed at a 9% rate on the taxable price of alcoholic beverages. The 9% rate on sales of alcoholic beverages replaces the 6% rate and is not in addition to that rate.

The 9% rate is effective for sales on and after July 1, 2011.

Licensed retailers can apply for a special Retail Off-Site Permit from the Comptroller's Office to sell wine produced by a Class 4 limited winery at a Farmer's Market listed with the Maryland Department of Agriculture. The permit must be issued to a licensed retailer authorized to sell alcoholic beverages for consumption off-premises, and whose license was issued by the local licensing board in the jurisdiction in which the Farmer's Market will be held.

Yes, retail receipts should be kept for two years or until audited. See Alcoholic Beverages Article 1-408.

State regulations do not require Catered Event Certificates to be kept for a certain length of time. A revolving calendar year should suffice. Check the regulations issued by your county liquor board.

Yes. Catering food requires a license from the county.

Yes. An alcohol catering license is needed if you plan to furnish alcoholic beverages. It is known as a Statewide Caterer (SCAT) License. See COMAR 03.02.01.18.

They are issued by the County Liquor Boards.

This information is available in the Comptroller's alcohol and tobacco tax annual reports.

Yes, you must obtain a $50 Non-Beverage Class C Permit. See Tax General TG 2-101(c).

Yes, a Non-Beverage Class E Permit is required. However, there is no fee.

"Happy hour" is regulated by each county's liquor board.

Price filing is no longer required for any form of alcohol. Brand registration is required for beer only.

A wholesaler pays the tax if the beer is imported from another country. An out-of-state non-resident dealer (a.k.a. supplier) pays the tax if the beer is purchased by a Maryland wholesaler. See Tax General TG 5-102 and TG 5-105.

Beer: A beer manufacturer cannot require participation, but participation by the wholesaler is legal for beer. A manufacturer can charge the wholesaler extra for advertising their product, but they cannot make them pay it. See Alcoholic Beverages Article 5-104.

Wine and Distilled Spirits: These manufacturers cannot charge extra for advertising.

It is a system whereby alcohol is sold from the supplier to the wholesaler, from the wholesaler to the retailer, and from the retailer to the consumer.

The legislature enacts statutes. The Comptroller adopts, amends and repeals regulations under the authority granted by statutes, following the procedures in the Administrative Procedure Act.

Contact the General Accounting Division at 410-260-7813.

Business liability: 410-767-1908
Personal liability: 410-649-0633 (usually an income tax issue)
Personal property tax: Clerk of the Circuit Court (in the respective county)

IRS individual tax questions: 1-800-829-1040
IRS business tax questions: 1-800-829-4933
Web site: www.irs.gov

No. By statute, the 6% sales and use tax is imposed on a bracketed basis. The amount of tax due is determined by the sale price in relation to the statutorily imposed brackets. The amount of tax increases one cent from one bracket to the next with 6 cents due on each exact dollar. The 9% sales and use tax is a flat rate. This means that when the tax calculation results in an amount between two whole pennies, the tax is rounded off. The tax computation must be carried to the third decimal place, and the tax then must be rounded to a whole cent using a method that rounds up to the next cent whenever the third decimal place is greater than four, and rounds down whenever the third decimal place is less than or equal to four. For example, if the taxable price of the alcoholic beverage is $8.24 the tax would be $0.74 ($8.24 times 9% = $0.742). If the taxable price of the alcoholic beverage is $8.29 the tax would be $0.75 ($8.29 times 9% = $0.746).

You must report the tax you charged on sales of alcoholic beverages separately from the tax imposed on sales of other items. Effective July 2011, the sales and use tax return will include separate lines for tax imposed on sales at the 6% rate and tax imposed on sales at the 9% rate. The revised sales and use tax return will also have separate lines for reporting tax on purchases at each rate as well.

No. As of August 1, 2013, EFT ACH is no longer an option for reporting or submitting sales and use tax payments.

Taxpayers required to pay with immediately available funds can pay using direct debit by electronically filing for free via bFile; or can pay using a credit card by going online or by calling 1-800-2PAY-TAX (1-800-272-9829). If you are new to bFile, please verify that your financial institution will accept debit transactions.

The 9% rate applies to sales of alcoholic beverages as defined in Tax-General Article §5-101(b). This includes sales of beer, distilled spirits, and wine, as well as any beverage or cocktail that may contain a mixture of both alcoholic and non-alcoholic components, including an alcoholic mixed drink, a frozen alcoholic cocktail, an alcoholic coffee drink, and a gelatin shot containing an alcoholic beverage.

Yes. Only products that are fit for beverage purposes and contain one-half of 1% or more of alcohol by volume are subject to the 9% rate. Other products, such as cooking wine and cooking sherry, as well as vanilla and rum extracts and similar items, are not subject to the 9% tax as they are not intended for beverage purposes. There are many personal care products and cleaning products that contain alcohol as well; however, these items are not included in the definition of alcoholic beverage and therefore are not subject to tax at the 9% rate.

If you buy a mixed drink that contains both alcoholic and non-alcoholic components, the sale of that beverage will be subject to tax at the 9% rate. However, the 9% tax does not apply to the sale of a bottle of grenadine or similar flavoring or mixer on its own that does not contain one-half of 1% or more of alcohol by volume. Those sales are taxed at the 6% rate unless otherwise exempt.

Effect on sales by exempt organizations:
Sales of alcoholic beverages made by specific types of organizations listed in Tax General Article §11-204(b) are also exempt from the 9% tax on alcoholic beverages.

Effect on purchases by exempt organizations:
Maryland sales and use tax exemptions apply to all purchases for use by the exempt organization, regardless of the applicable tax rate. Therefore, your organization's purchases of alcoholic beverages made to carry on the organization's work are exempt from the 9% tax on alcoholic beverages.

* You can access the Maryland Code, including Tax-General Article, online.

The tax must be separately calculated on sales of alcoholic beverages at the 9% rate and on sales of food, non-alcoholic beverages, and other merchandise at the 6% rate. The 9% tax amount must be listed separately from the 6% tax amount on the bill of sale.

For sales made between July 1, 2011 and June 30, 2012, if your sales include alcoholic beverages as well as other items, you must apportion the charge for the mandatory gratuity between the two categories. For example, if the total charge amounts to $300, and of that amount $200 is for sale of food and non-alcoholic beverages and $100 is for the sale of alcoholic beverages, then 2/3 of the amount of the gratuity is subject to the 6% tax rate and 1/3 is subject to the 9% tax rate. In this example, if the gratuity charged is $45, the 6% rate on the gratuity would be $1.80 (2/3 times $45 times 6% = $1.80) and the 9% rate on the gratuity would be $1.35 (1/3 times $45 times 9% = $1.35). The bill, therefore, would reflect total tax at 6% of $13.80 ($230 at 6%) and total tax at 9% of $10.35 ($115 at 9%).

Due to a 2012 law change, for sales made on and after July 1, 2012, charges for alcoholic beverages are subject to tax at the 9% rate and charges for mandatory gratuities are subject to the 6% rate regardless of whether the gratuities relate to sales of alcoholic beverages or sales of food and non-alcoholic beverages.

In order to be authorized to make direct wine shipments to Maryland residents, the law requires that the vendor be issued a direct wine shippers permit, and also requires that the vendor comply with existing tax laws, including the requirement to collect sales and use tax. Therefore, the vendor will be required to charge sales and use tax at the rate of 9% on sales of wine to Maryland residents. If the vendor imposes a separately stated shipping charge, that amount will not be subject to tax. However, if the shipping charge is not separately stated, or if the shipping charge includes a handling charge, whether that shipping and handling charge is separately stated or not, then the entire amount will be considered to be part of the taxable price of wine, and the 9% tax will apply to the whole charge for sales made prior to July 1, 2012.

For sales made on and after July 1, 2012, the 9% rate will apply to the charge for the wine, and the 6% rate will apply to any other separately stated taxable charge made in connection that the sale of the wine.

Yes. An inbound freight charge is part of taxable price. If the inbound freight charge is imposed on the sale of an alcoholic beverage, then the vendor must collect tax on the price that includes the inbound freight charge, whether separately stated or not.

For separately stated inbound freight charges on sales made prior to July 1, 2012, the 9% rate applies to all charges, and for sales made on and after that date, the 9% rate will apply to the charge for the alcoholic beverage, and the 6% rate will apply to the charge for inbound freight.

You may apportion the sales price between the alcoholic beverages and the other merchandise and charge the 9% sales and use tax on the taxable price of the alcoholic beverages and the 6% sales and use tax on the price of the other items. If the basket includes non-taxable merchandise as well, and you allocate the sales price among the three categories of merchandise (alcoholic beverages, taxable merchandise, non-taxable merchandise), then you may exclude the non-taxable items from the taxable price. However, if you charge a lump-sum price for the gift basket, and you do not apportion the sales price among the categories of items, you must collect the sales and use tax at the higher 9% rate on the entire price of the basket.

For sales made prior to July 1, 2012, itemized charges for equipment, supplies and labor that are directly and predominantly related to the sales of alcoholic beverages should be taxed at the 9% rate. Itemized charges for equipment, supplies and labor that are directly and predominantly related to the sales of food and non-alcoholic beverages should be taxed at the 6% rate.

For sales made on and after July 1, 2012, itemized charges for alcoholic beverages are subject to tax at the 9% rate and all other charges are subject to tax at the 6% rate.

If you do not itemize your bill in the manner discussed in Question 15 and instead elect to bill a lump-sum price for the entire bill or per-person charge, you must charge the higher 9% tax rate on the entire bill.

Alcoholic beverage sales for specific events for which contracts are fully executed prior to July 1, 2011 are subject to the 6% sales and use tax. Alcoholic beverage sales for specific events for which contracts are signed and executed on or after July 1, 2011 are subject to the 9% sales and use tax.

If the contract for the specific event is fully executed before July 1, 2011 and contains all material terms such as price, quantities, selections of food and beverages (alcoholic and non-alcoholic), and the names of the parties to the contract, the tax rate on the taxable price of alcoholic beverages is 6%.

If the contract for the specific event is fully executed on or after July 1, 2011, but prior to July 1, 2012, and it contains all material terms, such as price, quantities, selections of food and beverages (alcoholic and non-alcoholic), and the names of the parties to the contract, then the tax rate on the taxable price of alcoholic beverages is 9%.

If the contract for the specific event is fully executed on or after July 1, 2012, and contains all material terms such as price, quantities, selections of food and beverages (alcoholic and non-alcoholic), and the names of the parties to the contract, then the tax rate on the charge for the alcoholic beverages is 9% and the tax rate on all other charges is 6%.

The tax, whether at the rate of 6% or 9%, must be charged by the caterer at the time the contract is executed. The caterer must then report and pay the tax to the Comptroller by the required due date.

You must apportion your sales price between the taxable price of the alcoholic beverages and the taxable price of the food and non-alcoholic beverages and charge the tax accordingly. If you do not separately state the charges subject to the different rates, you must charge the higher 9% rate on the entire charge to the customer.

The cost of the meal and any other related taxable charges will be taxed at the 6% rate. You must pay the 9% sales and use tax rate on your purchase of any alcoholic beverages that are provided to customers at no charge.

That depends. If you pay a sales tax to the vendor in the state where you made the purchase and the rate of that tax is equal to or greater than the 9% rate, then you will not owe any additional tax when you bring the item into Maryland. However, if you are not charged a sales tax on your purchase, or if the amount of tax you pay is less than 9%, you will owe Maryland tax on the difference between the rate you paid to the other state and the 9% Maryland rate. You should also be aware that if you bring alcohol in excess of the quantity limitations specified in Tax-General Article §5-104(c) you will also owe the alcoholic beverage tax in addition to the sales and use tax.

For sales prior to July 1, 2012, you must charge the 9% sales and use tax on the sale of the beer and on any rental charge that you impose on the lease of the keg and related equipment. The deposit is not subject to sales and use tax. However, if the equipment is not returned and you retain the deposit as payment for the equipment, the deposit will be considered to be part of the taxable price of the alcoholic beverage and is then subject to the 9% sales and use tax.

For sales made on or after July 1, 2012, only the charge for the beer is subject to the 9% rate. Separately stated charges for rental of equipment are taxed at the 6% rate. If the equipment is not returned and you retain the deposit as payment for the equipment, the deposit will be considered to be the charge for the equipment and will be subject to tax at the 6% rate.

Because a sale that is subject to both sales and use tax and admissions and amusement tax is capped at 11%, you must charge the 9% sales and use tax on the sale of the alcoholic beverages, and apply the admissions and amusement tax to the gross receipts from the sale of alcoholic beverages at a rate no higher than 2%, even if the jurisdiction normally imposes a higher rate. Your gross receipts from sales of food and non-alcoholic beverages that are taxed at a 6% sales and use tax rate are subject to admissions and amusement tax at a rate no higher than 5% due to the cap.

This will depend on whether the charge for entry is truly an "admission" charge as opposed to being a charge for the sale of the wine. If you are allowed entry to the venue without payment of any charge, and the only payment collected is from those who participate in the tastings, then the charge will be considered to be a sale of an alcoholic beverage and the 9% sales and use tax will apply. On the other hand, if everyone has to pay the admission in order to gain entry into the venue, regardless of whether they participate in the tastings or not, then the sales and use tax does not apply to the sale of admission tickets. However, depending on the jurisdiction, the gross receipts from the sale of the tickets may be subject to the admissions and amusements tax. In this case, the entities that are providing the wine tastings are considered to be the consumer of the products, and must pay the 9% tax on the cost of the wine.

The refillable containers (growlers) are tangible personal property and are subject to the 6% sales tax rate. The contents of the growler are subject to the 9% tax rate. If the customer is not purchasing the growler, there is no sales tax on a previously purchased refillable container. However, the 9% tax rate applies to the purchase of each refill of an alcoholic beverage.

You are considered to be the consumer of the food and drinks that you provide and you must pay any applicable sales and use tax on your cost of the food and beverage. You must pay the 9% sales and use tax on your purchase of any alcoholic beverages that are provided to customers at no charge. The gross receipts on your ticket sales may be subject to the admissions and amusement tax depending on where you are located.

It is paid by wholesalers when they purchase tax stamps.

The Master Settlement Agreement (MSA) is an agreement that signed in November, 1998, by attorneys general in 46 states and five U.S. territories and the tobacco industry. The agreement resolved lawsuits filed by the attorney general against the tobacco industry and provided the states funding intended for tobacco prevention and control. Under the MSA, Maryland was awarded $1 billion over 10 years, beginning July 1, 2000. The Maryland legislature enacted Senate Bill 896/House Bill 1425 in April, 2000, which created the Cigarette Restitution Fund Program (CRFP). The CRFP oversees the use of MSA funds which are currently being used to fund activities and projects.

Other Tobacco Products (other than cigarettes).

July 1, 2000

Whoever reports the tax, should remit the tax, be it the wholesaler, retailer or consumer. If the wholesaler remits the tax, they should provide the retailer with a letter saying the tax was paid on their behalf. A wholesaler must report monthly. A retailer or consumer must report quarterly the date the product was purchased. Ultimately, the wholesaler has the primary responsibility to pay the tax.

The tobacco manufacturer pays the tax on the amount it costs to make the OTP product, not the invoice amount.

Yes, if the OTP is sold to Maryland by the manufacturer. Anyone who holds a cigarette license is obligated to submit the OTP tax.

No, the "wholesaler" for the purpose of this tax, means a person located in or out of the state who sells to a retailer in Maryland. The tax shall be paid by the wholesaler who sells the OTP to a retailer in Maryland. Subwholesalers are responsible for remitting the OTP tax on sales to Maryland retailers for the report month.

No. However, keep supporting documentation for audits, should they occur.

No. The tax rate is 15 percent of the "wholesale price". The wholesale price is defined as "the price for which a wholesaler buys other tobacco products". The tax must be calculated on the cost of the OTP sold during the report month.

Contact the Field Enforcement Division at 410-260-7490. Agents do not apply the stickers.

The stickers will be mailed to the Vending Machine Operator, providing the following information: name, company name (if applicable), and address.

21 years of age. See Criminal Law, 10-107.

No, provided that proper work permits are in place

Contact the Maryland Department of Occupational Safety and Health at 410-767-2215.

Five cartons per person. Importing more than five cartons is a felony if transported. See Tax General TG 12-104 and TG 13-1015.

The Maryland Comptroller’s Field Enforcement Division handles the enforcement of state laws governing cigarettes and tobacco.

Contact your local jurisdiction's law enforcement agency.

The current tax rate is $2.00 per pack of 20.
July 1, 1999 – Tax rate increased from $.36 to $.66 per pack of 20.
June 1, 2002 - Tax rate increased from $.66 to $1.00 per pack of 20.
Effective January 1, 2008, the rate increased from $1.00 to $2.00 per pack of 20.

No. It is illegal to purchase cigarettes over the Internet.

All cigarettes manufactured or sold in Maryland must be tested and marked as Fire Safe Cigarettes. See also Business Regulation BR 16-602.

EFT is the abbreviation for Electronic Funds Transfer, a technique used by the banking system to debit and credit bank accounts within a bank or between banks without the exchange of a paper document. EFT allows you to electronically pay your state withholding tax, motor fuel tax and corporation tax payments. EFT payments are voluntary for these three business tax types unless the payment is for $10,000 or more, in which case payments must be made electronically.

When you choose to use ACH Debit to pay your Maryland withholding tax, motor fuel tax or corporation tax, you are instructing the state to debit (electronically withdrawal) your tax payment from your designated account. Using a telephone, you designate the amount and date of the transaction, and you receive a five-digit reference code as proof of your transaction before you end the call.

When you choose to use ACH Credit to pay your Maryland withholding tax, motor fuel tax or corporation tax, you are instructing your bank to credit (electronically send) your tax payment to the state's bank. Using software from your bank, you designate the amount and date of the transaction.

Beginning August 1, 2013, EFT ACH will no longer be available for sales and use tax payments.

To use the ACH Debit option, complete Sections A and B of Form EFT, Authorization Agreement for Electronic Funds Transfer.

To use the ACH Credit option, you must first contact your bank to determine if your bank offers ACH origination. Your bank must complete Section C of Form EFT to verify that your bank can conform to these standards. You must also complete the contact person information in Section A.

Once you have chosen either the ACH Debit or ACH Credit method and completed the pertinent sections on Form EFT, either fax it to 410-260-6214 or mail it to:

EFT PROGAM
PO BOX 1509
ANNAPOLIS MD 21404-1509

We will process your application within 10 business days after receipt, and you will receive specific instructions for your method of EFT. If you do not receive your instructions within two weeks, please contact the Taxpayer Service Division at 410-260-7980,  Monday - Friday, 8:30 a.m. - 4:30 p.m. EST.  Hearing impaired users call via Maryland relay at 711. 

An originator identification number identifies the State of Maryland to your bank, so your bank knows that it can allow the electronic payment to proceed. If your bank is requesting an originator identification number, contact the Taxpayer Service Division for instructions. We can be reached by telephone at 410-260-7980, Monday through Friday, 8:30 a.m. - 4:30 p.m. EST.

If your bank account has a block or filter on it, you will need to provide your bank with the State of Maryland's Originator Identification Number. An originator identification number identifies the State of Maryland to your bank, so your bank knows that it can allow the electronic payment to proceed. If you need this number, contact taxpayer service for instructions at 410-260-7980, Monday - Friday, 8:30 a.m. - 4:30 p.m. EST.

If the tax payments that you have made using EFT ACH Debit or Credit do not appear to be withdrawn from your bank account within a reasonable amount of time, you may have a security block or filter on your bank account.

First, contact your bank to see if they are blocking the EFT electronic payment request. If your bank account has a block or filter on it, you will need to provide your bank with the State of Maryland's Originator Identification Number.

An originator identification number identifies the State of Maryland to your bank, so your bank knows that it can allow the electronic payment to proceed. If you need this number, contact taxpayer service for instructions at 410-260-7980, Monday - Friday, 8:30 a.m. - 4:30 p.m. EST.

If your bank advises you that they do not have a block or filter on your account, contact taxpayer service for assistance resolving the issue.

No. You must either fax it to 410-260-6214 or mail it to:

EFT PROGRAM
PO BOX 1509
ANNAPOLIS MD 21404-1509

If you are submitting state withholding tax, corporation estimated tax or corporation extension tax payments electronically using EFT ACH Debit or Credit, you do not need to submit a paper Form MW506, Form 500D or Form 500E. You will need to submit an annual corporation return (Form 500) and/or an annual withholding reconciliation return (Form MW508), either electronically or by paper, by the due date of the return.

In addition, if you are submitting state motor fuel tax payments electronically using EFT ACH Debit or Credit, you will need to submit a monthly paper motor fuel report.

Yes, complete a new Form EFT, Authorization Agreement for Electronic Funds Transfer, indicating that it is a revised application by checking the check box titled Revision at the top of the form, and either fax it to 410-260-6214 or mail it to:

EFT PROGRAM
PO BOX 1509
ANNAPOLIS MD 21404-1509

We will process your application within 10 business days after receipt, and you will receive confirmation in writing that we have completed your revision. If you do not receive your confirmation letter within two weeks, please contact us.

If you made an error while submitting an ACH Credit payment, please either fax an explanation of the error to 410-260-6214 or mail it to:

EFT PROGRAM
PO BOX 1509
ANNAPOLIS MD 21404-1509

If you made an error while submitting an EFT ACH Debit payment, review your debit instructions and follow the instructions regarding cancellations. If you cancel the payment, you will receive another five-digit confirmation number. If you are unable to cancel the payment, contact taxpayer service at 410-260-7980, Monday - Friday, 8:30 a.m. - 4:30 p.m. EST.

No. The EFT payment method is not available for those tax types.

When you are using EFT ACH Debit or ACH Credit to pay your state withholding tax, motor fuel tax and corporation tax payments, you must submit the payment before 2:00 p.m. EST on the business day prior to the due date. When you are using the free online bFile or direct debit application to pay and file your state business taxes, you must submit the return and payment before midnight EST on the due date.

You can file a zero return for withholding and sales tax by telephone at 410-260-7225, or online using b-File. You can file a zero return for a corporation extension by telephone at 410-260-7829 or online using the corporation extension application.

The EFT Unit will only discuss your account with the owner, partner, officer or primary EFT contact person that is designated on the Form EFT that you submit. If the primary EFT contact person changes, it is the responsibility of the owner, partner, or officer who originally completed the EFT form, to revise the contact information on Form EFT.

If the primary EFT contact person is a third party vendor, they must send a copy of the Power of Attorney when submitting an EFT application.

No, you do not need to complete Form EFT if you use our free online bFile service to file and pay your withholding or sales tax. You must, however, register online to use bFile, creating your own secure Logon ID Number and Password. See Filing Business Taxes Electronically for more information.

If you are making a payment for withholding or sales tax, you can make your payments online using bFile. Beginning August 1, 2013, EFT is no longer available for sales and use tax payments.

If you are making a corporation or motor fuel tax payment, you must mail a check until your EFT application is processed.