What is maryland sales tax

Before making a purchase, an exempt organization must give the vendor an exemption certificate. An organization must apply to the Comptroller of Maryland to obtain an exemption certificate.

Sales by an exempt organization - Generally, even an exempt organization must collect and file sales tax when it sells goods. However, there are certain exemptions, including:. People or organizations that are exempt from paying sales tax on purchases must give the vendor an exemption certificate before the sale.

A vendor who sells to an exempt person or organization must keep a record of the certificates. Casual and isolated sales - People who do not regularly sell goods or taxable services are exempt from sales and use tax if they meet two conditions. The filing is due on the 20th day of the month.

The taxpayer must complete the filing on the 20th day of the month after the end of each quarter, as follows:. The Comptroller of Maryland may choose to convert a taxpayer from a quarterly filer to a monthly filer. On the other hand, the Comptroller usually does not force a taxpayer to file less often quarterly instead of monthly.

The taxpayer must also submit a Combined Registration Application with the Comptroller to receive a sales and use tax license. Paper filing - Sales taxes can be filed on paper and mailed to the Comptroller. After a vendor obtains a sales and use tax license, the Comptroller will automatically send the vendor a form to report sales taxes.

Electronic filing - Sales taxes can be filed online through the Comptroller website. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. How to Obtain a Sales and Use Tax License According to Maryland law, any retailer making sales in Maryland is required to secure a sales and use tax license. Sales and Use Tax Exemptions In Maryland, there are certain goods that are tax-exempt from sales and use taxes, including: Machinery and equipment: Any machinery or equipment that will be used as part of production activities is exempt from Maryland sales and use taxes.

Repair labor: Any restoration of used property is non-taxable, although fabrication and the purchase of over-the-counter parts are subject to Maryland sales and use taxes. Interested in Learning More? Contact S. If entitlement to exemption is not evident from the documents of sale, the vendor should obtain a certificate from the purchaser stating that the property will qualify. Vendors may not recognize the resale and incorporation exclusions unless you provide them with a resale certificate with a signed statement that the purchases are for resale and including the buyer's name, address and Maryland sales and use tax registration number.

The sales tax does not apply to the sale of photographic materials used to produce an item such as a photographic plate used in composing, printing or producing another item used in printing.

Sales of artwork, electrodes, electrotypes, composition, litho-graphic plates or negatives, mats, photo engravings, stereotypes or typographies for direct use by a person engaged in printing tangible personal property for sale are also exempt. A person selling the items, other than those that are photographic in nature, must pay the tax on all materials used to produce them. A printer who produces these items for self use also must pay tax on all materials.

No special forms are needed to claim the machinery and consumable exemptions, other than Form ST for utilities and fuel. If a vendor requires documentation to support a claim for the machinery exemption, a signed form certifying use in production activities may be provided. The consumables exclusion may be supported by a statement in the form of a resale certificate stating that the property will qualify.

Certain qualified nonprofit organizations are exempt from paying tax on the purchase of items which will be used in carrying out the business of the organization. The state of Maryland issues exemption certificates to properly qualified organizations. You should record the eight-digit number from this certificate on your copy of the receipt or sales slip. If you are presented with an exemption certificate, you may use our online service to verify its validity.

Materials that will be incorporated in property to be produced for sale are not subject to tax. You should keep a resale certificate, signed by the buyer and bearing the buyer's Maryland registration number, on file to document the tax-free sales of exempt materials. If you are presented with a resale certificate, you may use our online services to verify its validity. Reproductions of records made in the regular course of business, as well as computerized records, are permissible if you follow the guidelines outlined below.

Microfilm and Microfiche You must offer suitable facilities for viewing microfilm and microfiche records. You must also provide any copies which may be required for tax verification purposes.

Computerized Tax Accounting Produce visible records necessary to verify tax liabilities. Permit a transaction to be traced back to the original source or forward to the totals. Make available a description of the system, including flow charts and procedures. Have controls to insure accuracy. The U. Department of State issues a white plastic tax exemption card to qualified diplomats.

You must record the tax-exempt number from the back of the card onto the sales slip. Please be aware that the certificates may not be valid for all purposes. Cards with GREEN stripes entitle the holder to an exemption from the tax on all purchases except the tax on transient accommodations. You may use our online service to verify the validity of a diplomatic tax exemption card. If you frequently deal with the same vendor, you may provide that vendor with a blanket resale certificate stating that all purchases are for resale.

However it is important to note that your vendor retains the right to ask for a resale certificate for each transaction. If the vendor agrees to receive your blanket resale certificate then all you have to do is give the supplier your sales and use tax registration number. Record Keeping Vendors must clearly document the reason for all tax-exempt sales and should keep resale certificates on file as part of your business records.

You can be held liable for uncollected taxes if you accept resale certificates for sales that you know or should know are not for resale. View a Sample Blanket Resale Certificate. The following report s are part of a collection of monthly revenue reports published by the Comptroller's Office.

For a full listing of monthly and annual reports, see Spotlight on Maryland Money. Application All Business Tax Forms. Home Business Sales and Use Tax Sales and Use Tax Every state that has a sales tax also has a use tax on the purchase of goods and services as defined by law. Learn about it! Get Sales and Use Tax Information for consumers, or get all the details in the business section.

File it! File a Use Tax Return or to get a credit for sales tax paid in another state. Pay it! Submit your payment along with the return. Get a refund! If you improperly paid sales tax and the merchant won't give you credit. File here. Get help! Additional Sales and Use Tax Information For additional information about the specifics of certain types of sales rates, fees and exemptions, visit the following two sections in the sales and use tax section for businesses: Special Situations Tax Exemptions Tax Rates Effective January 3, , the Maryland sales and use tax rate is 6 percent, as follows: 1 cent on each sale where the taxable price is 20 cents.

Download our sales and use tax rate chart. Special rates and situations An Updated November 25, 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.

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. 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.

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. Find answers to questions regarding Maryland's sales and use tax with regard to out of state purchases, flea markets, alcoholic beverages and more.

I recently bought a sofa in Delaware where there is no sales tax and arranged to have the sofa delivered to my home in Maryland. Do I have to pay Maryland sales tax on the purchase? 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. Is the tax on out-of-state purchases computed the same way as the tax on sales inside Maryland? Do I have to display my license at a flea market?

What is the sales and use tax rate on sales of alcoholic beverages in Maryland? What is my sales and use tax registration number? These tax-free events will continue until the legislature decides to revisit the issue.

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