Maryland is a state located in the Mid-Atlantic region of the United States. It shares its borders with Pennsylvania to the north, Delaware and the Atlantic Ocean to the east, District of Columbia, Virginia, and West Virginia, to its south and west.
Dubbed as "America in Miniature," the Maryland state has a diverse culture, varied geography, rich history, flouring economy, favorable business environment, and a cornucopia of opportunities. Consequently, attracting numerous people to settle in here throughout the year.
So, are you planning to start, expand, or relocate your business in Maryland? You must be aware of plenty of factors, including Maryland Sales Tax, for which our experts have compiled a fantastic Maryland Sales Tax Guide along with a sales tax calculator to educate you with essential facts and laws about Maryland sales tax. Besides, you will also learn to calculate Maryland Sales Tax like a Pro.
So let's get started!
Businesses and Sellers engaged in the retail sale or lease of tangible personal property (TPP), and specific services, and have Nexus in Maryland are required to pay MD Sales tax. However, purchases used for production by manufacturers, resales by distributors are not subjected to MD Sales Tax. Moreover, separately stated charges on delivery service, professional services, installation, and interest are also not applicable.
Businesses and Sellers are required to register, collect, manage, and transfers the sales tax to the Maryland Tax Department while staying in compliance with state laws and avoid penalties and interest.
The sales tax determined on four factors:
To calculate Sales Tax in Maryland, follow the steps below:
As a business owner, you are only required to collect sales tax if you are eligible for collecting sales tax and have Sales Tax Nexus in the Maryland State. And to determine your Nexus in Maryland, you must have any of the following:
Out of State Seller is eligible to register, collect and remit sales tax under Maryland Law, if:
Once you have determined that your Nexus is with Maryland, next is to deduce the Sales Tax rate (State) applicable to your product. As no city or county in Maryland levy local sales tax, so sales tax rate remains the same throughout Maryland. However, sales rate may vary according to a type of product like alcoholic beverages are charged at 9%, whereas most other taxable tangible goods are charged at 6%.
After determining the sales tax rate according to the location and type of purchases, it is easy to calculate the sales tax amount charged on the product and gross price (amount after tax) of a product.
Example # 1:
For instance, you are selling an Alcoholic Beverage on your store in Annapolis, Maryland, having a net price tag of $25. The amount that a buyer has to pay (including sales tax) on a check out would be:
Net Price (amount before Tax) of an Alcoholic Beverage: $25
Total Sales Tax rate: 0.00% (Annapolis) + 0.00% (Anne Arundel County) + 9.0% (Maryland State) = 9.00%
Total Sales Tax amount = $25 x 9.00% = $2.25
Gross Price (Amount after Tax) = 25 + 2.25 = $27.25
It means the amount the buyer has to pay for an Alcoholic Beverage on a cash counter would be $27.25.
Using our Sales Tax Calculator:
All of the steps mentioned above can be skipped to get an instant result using our Sales Tax Calculator. All you need is:
Our calculator will automatically calculate the result, and represents it in 3 different forms, as shown in the image below:
In the example above, we have explained to you to calculate the Sales Tax amount payable in a product, and the Gross Price of the Product.
But there are also instances when you are required to deduce how much sales tax buyer has actually paid on a product or you may want to check the accuracy of the sales tax indicated on your item's receipt.
This is where the Reverse Sales Tax Calculation Kicks in. And luckily, our Maryland Sales Tax Calculator can perform this calculation like a Pro.
Your buyer has paid $255 for an E-Bike at your store in Hanover, Maryland. Now the buyer is inquiring how much an E-Bike actually cost before the sales tax was added. So you need to follow the steps below to determine the amount before tax (net price) of an E-Bike:
Gross Price (Amount after Tax) of E-Bike: $255
Total Sales Tax rate: 0.00% (Hanover) + 0.00% (Anne Arundel County) + 6.00% (Maryland State) = 6.00%
Gross Price with sales tax = [Net Price × (tax rate in decimal form + 1)]
255 = [Net Price x ((6.00/100) + 1)]
255 = Net Price x 1.06
$240.6 = Net Price
So the original Price (net price) of the E-Bike was $240.6.
Using our Sales Tax Calculator:
You can also use our Sales Tax Calculator for Reverse Sales Tax calculation to skip the aforementioned manual method. All you need is:
Our calculator will automatically calculate the result and represents it in 3 different forms.
Answer: The general sales tax on tangible personal property or taxable service is 6%, unless or otherwise exempted. However, it is 9% on Alcoholic Beverages.
Answer: You can pay Maryland Sales Tax online here.
Answer: Marland Sales Tax rate applicable to the purchase of cars is 6%.
Answer: Most raw groceries, residential energy, and prescription drugs are exempted from sales tax in Maryland.