This blog was last updated on April 10, 2026
Sales tax in Maryland is relatively straightforward compared to other states, but businesses must still understand key rules around nexus, exemptions, and filing to stay compliant.
What is the Maryland Sales Tax Rate?
The Maryland sales tax rate is 6% and applies statewide. Unlike many states, Maryland does not allow local jurisdictions to impose additional sales taxes.
This means businesses only need to apply a single, consistent rate when calculating sales tax Maryland obligations.
What is Taxable in Maryland?
Maryland sales and use tax applies to most tangible personal property and certain specified services. Businesses selling taxable goods or services must collect and remit tax as part of Maryland tax compliance requirements.
Examples of taxable items and services include:
- Clothing
- Prewritten and custom computer software
- Certain data and information technology services
- Telecommunication services
- Certain installation or repair services
- Digital goods
Sales Tax Nexus in Maryland
Businesses must collect sales tax in Maryland if they meet nexus requirements. Nexus can be established through either physical presence or economic activity.
MD Physical Nexus
Physical presence is created by having a business location, office, warehouse, vehicle, employee, or other representative operating in the state of Maryland.
MD Economic Nexus
Maryland enforces economic nexus for remote sellers. A business must collect sales tax in Maryland if it meets either $100,000 or more in annual sales, or 200+ separate transactions during the current or previous calendar year.
Maryland Sales Tax Exemptions
Certain goods, services, and buyers may qualify for tax exemptions under MD state law.
Product and Service Exemptions
Examples:
- Most services (unless statutes specify otherwise)
- Most medicines, drugs, and medical equipment
- Certain agricultural items used for farming purposes
- Certain baby products and breastfeeding supplies
Entity-Based Exemptions
Some organizations are exempt from Maryland sales and use tax, including:
- Qualified nonprofit entities (e.g., 501(c)(3) and 501(c)(4))
- Religious institutions
- Certain wholesalers
- Retailers selling for resale
- Industrial processors
- Schools
- Government entities
How to Claim Sales Tax Exemption in Maryland
To claim an exemption, buyers must provide a valid exemption certificate at the time of purchase. Businesses should retain these certificates as part of their tax compliance documentation.
Additional guidance on acceptable exemption formats can be found in Sales and Use Tax Exemption Certificates.
Maryland Filing and Remittance Requirements
Businesses registered for Maryland tax filing must submit returns and remit collected tax through approved methods. Filing options include:
- E-filing via Maryland Tax Connect (recommended)
- Paper filing using:
- Form SUT202-202F – Sales and Use Tax Return, which can be mailed upon
- Form ST118 – Consumer Use Tax Return
Filing frequency depends on your sales volume and assigned filing schedule.
Frequently Asked Questions
Does Maryland have sales tax holidays?
Yes, Maryland offers periodic sales tax holidays for qualifying items.
Are there any special point of sale fees in Maryland?
Yes, certain transactions may include additional fees, such as:
- E911 fees
- Waste tire fees
- Bag fees
These are not part of standard Maryland tax rates but may apply depending on the product or service.
Are shipping charges taxable in Maryland?
Generally, shipping charges are not taxable if they are separately stated.
Is Maryland origin- or destination-based?
Maryland is a destination-based state, meaning tax is calculated based on the buyer’s location.
How to Register for a Maryland Sales Tax License
Maryland businesses or individuals selling tangible personal property or certain services to Maryland consumers may need register to collect sales tax when meeting qualifying requirements. More information may be found Maryland Tax Connect.
Additional Resources
For more guidance on state sales tax requirements and multi-state compliance: