Managing sales tax in Maryland can feel complicated, especially for restaurants, retailers, and service-based businesses juggling taxable goods, exempt items, and category-specific tax rates. This guide breaks down everything you need to know, from what’s taxable to how to register, file, and stay compliant, so you can run your business with confidence.
Does Maryland have sales tax?
Yes. Maryland does have a statewide sales tax, and unlike many states, it does not allow additional county or local sales taxes. That means most taxable sales made in Maryland are subject to the same statewide rate, no matter where your business operates. If you sell taxable goods or services in Maryland, you are required to collect and remit sales tax to the Maryland Comptroller.
What is Maryland’s sales tax?
Maryland’s statewide sales tax rate is 6%. This rate applies to most retail sales of tangible personal property and certain taxable services throughout the state.
There are a few exceptions to the 6% rate that businesses should be aware of:
- Alcoholic beverages: taxed at 9%
- Car rentals: taxed at 11.5%
- Peer-to-peer car sharing: taxed at 8%
- Manufactured homes: taxed at 5%
Because Maryland does not impose additional county, city, or local sales taxes, the rate you charge is determined solely by the type of product or service, not the customer’s location.
How to calculate Maryland sales tax?
Calculating sales tax in Maryland is fairly simple because the state uses one statewide rate for most taxable purchases. To determine the total tax you should charge, start with the 6% statewide rate and apply it to the sales price of the taxable item or service.
Basic formula:
Sales Price × 6% = Sales Tax
Then, add the tax to the sales price to get the final amount the customer owes.
Where things change is when you’re selling items that fall under Maryland’s special tax rates. In those cases, you apply the rate specific to that item.
Example:
If you sell a $100 taxable item, the sales tax is $6.00 (100 × 0.06), making the total $106.
If you sell $100 worth of alcoholic beverages, the sales tax is $9.00 (100 × 0.09), making the total $109.
Because Maryland does not have county or city sales taxes, you never need to calculate separate local rates. Everything is determined by the statewide or category-specific tax rate.
Using Our Reverse Sales Tax Calculator
If your business prefers to display clean, tax-included pricing, common for restaurants, cafés, salons, breweries, and service providers, a reverse sales tax calculator makes it easy. It works by calculating backwards from the final price you want customers to see.
Since Maryland uses a single statewide rate for most taxable items, calculating tax-included prices is easy. With the reverse calculator, you simply enter the total price (the amount you want printed on your menu, price tag, or display), and the tool will provide the pretax amount for you. For example, if you want to charge a flat $20 for an item, the reverse calculator will determine the sales price before Maryland’s 6% tax, and show you exactly how much of that $20 goes toward tax. The pretax amount is what you would enter into your point-of-sale (POS) system.
This is especially helpful if you want to avoid odd totals at checkout and keep your pricing simple and consistent. It also helps businesses ensure compliance without manually working backwards through the math.
What is subject to sales tax in Maryland?
Maryland taxes most tangible personal property, meaning nearly all physical goods you can buy in-store or online. This includes common retail categories such as:
- Artwork and collectible items
- Automotive and vehicle purchases
- Clothing, shoes, and accessories
- Digital products (downloaded movies, music, e-books, and magazines)
- Everyday food and beverages
- Furniture, home goods, and décor
- Jewelry and personal items
Maryland sales tax on services
Maryland only taxes services that are specifically named in state law. While the full list is extensive, here are some of the more common service categories that are taxable:
- Commercial cleaning for offices or industrial spaces
- Telecommunications services, including mobile plans, prepaid services, and premium call features
- Security-related services, such as private security, system monitoring, or detective services
- Credit reporting and background information services
- Custom production, like creating personalized printed or digital items
- Certain IT and digital services, including data processing or software-related services
Because Maryland’s taxable service list is detailed and specific, businesses often need to review the full state guidance to confirm taxability.
What items are exempt from sales tax in Maryland?
Maryland exempts several everyday essentials from sales tax, even though most physical goods are taxable. Grocery-type food for home consumption is exempt, as are prescription medications, insulin, certain durable medical equipment, and many items used for medical treatment. Clothing is generally taxable in Maryland, but apparel that qualifies as a medical supply, such as orthopedic supports or specialized protective garments, is exempt. Prescription eyewear, including corrective contact lenses and glasses, is also tax-free.
Maryland additionally exempts a range of hygienic products, such as baby wipes, mouthwash, and feminine hygiene products. Residential utilities, agricultural supplies, and items purchased for resale are also exempt under Maryland law.
Maryland food sales tax
Maryland does not tax most grocery-type food sold for home consumption. However, not all food products qualify for this exemption. Several categories are taxable in Maryland, including:
- Alcoholic beverages (taxed at 9%)
- Edible cannabis products (also 9%)
- Candy and confectionery
- Carbonated beverages and soft drinks
- Food prepared for immediate consumption
These items are considered taxable even when sold in grocery stores or convenience stores.
While most groceries are exempt, restaurant and ready-to-eat foods are not. Meals, hot foods, sandwiches, and anything prepared for immediate consumption are fully taxable at the standard 6% rate. If your establishment serves alcoholic beverages, whether beer, wine, or cocktails, you must apply Maryland’s 9% alcohol tax on those sales.
Food tax rules can be tricky, especially when your business sells a mix of exempt groceries, taxable prepared foods, soft drinks, and alcoholic beverages. DAVO by Avalara removes the complexity by syncing with your POS, setting aside the exact sales tax you collect each day, and filing and paying it on time automatically. Whether you’re operating a restaurant, market, bakery, or café, DAVO ensures you’re collecting the right amount and that your tax is always submitted accurately and on schedule. Instead of worrying about tax obligations, you can focus on your customers while DAVO handles the compliance.
How to manage tax-exempt sales in Maryland?
In Maryland, most sales are taxable unless the buyer can prove that the purchase qualifies for an exemption. The Maryland Sales and Use Tax Exemption Certificate verifies that the buyer is purchasing items for resale, is a qualifying nonprofit, or qualifies for another statutory exemption. To document a tax-exempt sale, retailers typically need to note the organization’s name and the exemption certificate number on the sale record.
If a customer claims an exemption that does require documentation, such as purchasing gas, electricity, steam, oil, or coal, you must collect a valid exemption certificate at the time of sale.
Maryland expects retailers to verify that the certificate appears complete, reasonable, and applicable to the transaction. If the certificate is missing or invalid, the retailer can be held responsible for the tax. The state makes it easy for sellers to verify exemption certificates. Businesses can confirm a customer’s exempt status using the state’s Verify Tax Exempt Status tool.
Maryland sales tax holiday
Maryland offers two annual sales tax holidays that give shoppers a break and require retailers to temporarily stop charging the state’s 6% sales tax on qualifying items. Businesses should prepare in advance to ensure their POS systems and staff apply exemptions correctly.
Shop Maryland Tax-Free Week (Clothing & Footwear)
Every year, Maryland usually designates the second Sunday in August through the following Saturday as Shop Maryland Tax-Free Week. During this event, qualifying clothing and footwear priced at $100 or less per item are exempt from sales tax. The first $40 of a backpack or bookbag is also tax-free. Accessories, such as jewelry, hats, or handbags, do not qualify, with the exception of backpacks.
This week-long holiday happens every year, so retailers can expect it to return each August unless state law changes.
Shop Maryland Energy Weekend (Energy Star Products)
Maryland also hosts an annual Energy Star sales tax holiday. Beginning the Saturday before the third Monday in February and ending that Monday, qualifying Energy Star appliances are exempt from the state’s 6% sales tax. Eligible items typically include:
- Air conditioners
- Washers and dryers
- Furnaces, boilers, and heat pumps
- Standard-size refrigerators
- Dehumidifiers
- Programmable thermostats
- Compact fluorescent light bulbs
During this weekend, retailers must stop charging sales tax on qualifying Energy Star products sold in-store or online to Maryland customers.
Make your sales tax less taxing with DAVO.
How to apply for a Maryland sales and use tax license?
If your business sells taxable goods or services in Maryland, you must register for a Maryland sales and use tax license before collecting any tax. Registration is handled through the Maryland Business Express portal, the state’s online system for setting up business accounts and tax registrations.
To get started, visit Maryland Business Express and complete the Combined Registration Application (CRA). This application covers several state tax accounts, including sales and use tax, employer withholding, and other business-related taxes, so you only need to register once. You’ll be asked for basic business details such as your federal EIN or Social Security number, business structure, ownership information, and the types of products or services you’ll be selling.
Once your application is submitted, most businesses receive their sales and use tax license electronically, and a physical copy is mailed shortly after. Maryland requires you to display your license at your business location or have it readily accessible if you operate online, mobile, or seasonal retail operations.
If you’re taking over an existing business, keep in mind that Maryland licenses are not transferable. You must apply for your own before making taxable sales. Registering early ensures you’re ready to collect tax the moment you begin operations.
How to file Maryland sales tax online?
All sales and use tax returns can be filed electronically through the Maryland Tax Connect portal. This online system is where you’ll report taxable and exempt sales, submit returns, view account history, and manage your filing schedule. Once your sales and use tax license is active, you can log in at any time to file, amend, or review your returns.
Your filing will include:
- Total gross sales
- Exempt sales
- Taxable sales
- Any use tax owed
- The appropriate Maryland tax rates for the products you sell
If your business has no activity during the filing period, you must still file a zero return to remain compliant.
Maryland strongly encourages online filing, but if you need paper return forms mailed to you, you can request them by contacting the Comptroller’s office. Businesses in Central Maryland can call 410-260-7951, and those outside the Baltimore metro area can call 1-800-638-2937 for assistance.
The Tax Connect system provides instant confirmation once your return is successfully submitted, helping you keep clean, accessible records.
How to pay Maryland sales tax?
Maryland encourages all businesses to pay their sales tax electronically, and any business owing $10,000 or more in a filing period is required to file and pay online. The easiest way to pay is through the Maryland tax portal, where you can make a direct debit (ACH) payment at no extra cost. This method posts quickly and helps ensure your payment arrives on time.
If you don’t want to sign into your Tax Connect account, Maryland allows you to submit a guest payment, but only ACH/direct debit is available when paying this way. You may also pay by credit card online (fees may apply), but this option is only available through your logged-in Tax Connect account.
Maryland also still accepts checks and money orders. Payments should be made payable to Comptroller of Maryland – SUT and include your business tax identification number. Mail your return and payment to Comptroller of Maryland, Revenue Administration Division, 110 Carroll Street, Annapolis, MD 21411-0001.
No matter how you pay, Tax Connect will provide a confirmation, giving you a clear record that your payment was submitted successfully.
Maryland sales tax due dates
In Maryland, sales and use tax returns are generally due on the 20th day of the month following the end of your reporting period.
Your filing frequency, monthly, quarterly, biannually, or annually, is assigned by the Comptroller based on how much tax you collect. That schedule will appear on your sales and use tax license and inside your Maryland Tax Connect account. If a due date lands on a weekend or legal holiday, the deadline automatically moves to the next business day.
Because specific due dates can shift slightly year to year, Maryland publishes an online calendar of filing deadlines. Businesses should check this calendar regularly to confirm their next due date and avoid penalties and interest.
Maryland’s timely discount for retailers
Maryland rewards businesses that file and pay their sales tax on time by allowing them to keep a small portion of the tax they collect each period. The discount is based on a tiered structure: you can retain 1.2% of the first $6,000 in sales tax you owe, and 0.9% of any amount above $6,000. If your total tax due is $6,000 or less, the calculation is straightforward. You simply take 1.2% of that amount. For returns over $6,000, you calculate 0.9% on the full amount and then add a flat $18.
Maryland caps this discount at $500 per return, and businesses filing a consolidated return are limited to the same $500 maximum across the entire filing. The discount is only available when both your return and payment are submitted on time. Late filings or late payments automatically forfeit the discount, even if the return is only a day past due.
If your business operates in multiple states, you can review our Sales Tax Vendor Discount Guide to see where else you may qualify for similar discounts and how Maryland’s program compares. With DAVO, this collection allowance is returned to the business in full, sometimes covering the full subscription cost to DAVO.
Maryland sales tax late filing penalties
Maryland takes late sales tax filings and payments seriously. If you miss a deadline, the state applies a 10% penalty on the tax due, and interest begins accruing from the original due date of the return. The interest rate changes each year but typically falls in the 11–12% range, which can add up quickly if the balance remains unpaid. In some cases, penalty charges can rise as high as 25% of the tax owed, depending on how long the account remains delinquent.
If tax remains unpaid after the Comptroller issues an assessment notice, the state may take collection actions. These can include placing a lien on your property, intercepting bank accounts, or even garnishing wages to recover the outstanding balance. Businesses that file late also lose Maryland’s sales tax discount, making it even more important to file and pay on time.
How DAVO can help with Maryland sales tax
Sales tax in Maryland comes with firm deadlines, stiff penalties, and detailed rules that can be difficult to manage manually. DAVO takes the work off your plate by syncing directly with your POS, setting aside the exact sales tax you collect each day, and automatically filing and paying it on time, every time, guaranteed. Whether you’re managing exempt groceries, taxable prepared foods, or items taxed at special rates, DAVO prevents missed due dates, and keeps you compliant, so you can focus on serving customers instead of wrestling with tax paperwork.
Choose your POS system to get started with DAVO.
Comptroller of Maryland Information:
https://www.marylandcomptroller.gov
410-260-7980
