Maryland: Sales Tax Handbook
How to file your sales taxes in Maryland
Once your business has a Maryland sales tax license and begins to make sales, you are required to start collecting sales taxes on behalf of the Maryland government and filing regular sales tax returns. This page will help you understand the basics of your tax collection and filing responsibilities.
How To Collect Sales Tax In Maryland
If the seller has an in-state location in the state of Maryland, they are legally required to collect sales tax at the tax rate in which the buyer of their product is located, as Maine is a destination based sales tax state. This means that a business located in one state in Maryland who makes a sale to a buyer in a separate city is required to charge their buyer's local sales tax.
If the seller's location is out of state, then the state of Maryland also requires the seller to charge sales tax based on the buyer's location.
Sales Tax Collection Discounts In Maryland
Maryland allows merchants to keep a small percentage of the sales tax they collect as a collection discount, which serves as compensation for the work required to comply with the Maryland sales tax regulations
The collection discount is 1.2% of first six thousand dollars of the tax that has been collected, and it must be noted that it is possible for 0.9% of excess to be claimed as a credit. The credit must five hundred dollars for each return. Maryland employs a single discount. It must be noted that this sort of credit doesn't apply to any sales and use tax which the seller must pay when it involves any sort of taxable purchase made by the seller.
Your Maryland Sales Tax Filing Requirements
To file sales tax in Maryland, you must begin by reporting gross sales for the reporting period, and calculate the total amount of sales tax due from this period.
In the state of Maryland, all taxpayers have three choices, for filing their taxes. One option is to file online by using the Maryland Department of Revenue. This online system can also be utilized to remit the payment. The online system Autofile can be utilized to both file and pay your business's taxes online. the final option is filing manually through the mail, using form 202. However, it must be noted that if your business's tax liability over the previous year was one million dollars or more, you must both file and pay your taxes online.
Tax payers in Maryland should be aware of several late penalties the state applies. The penalty for late filing is a 10% penalty, with interest at no less than 1% a month. If you receive a notice for missing the due date for filing, an additional estimated assessment may result in an additional penalty. There is also a thirty dollar charge for bad checks.
The state of Maryland requires that a seller who owns a sales tax permit files sales tax return on the required day, so long as the tax return would have been "zeroed-out", and there is nothing to report.
Your Maryland Sales Tax Filing Frequency & Due Dates
Your business's sales tax return must be filed by the 20th of the month following reporting period. For a list of this year's actual due dates, see our calendar of Maryland sales tax filing due dates.
Where To File Your Maryland Sales Tax Return:
Filing Your Maryland Sales Tax Returns Online
Maryland supports electronic filing of sales tax returns, which is often much faster than filing via mail.
Maryland allows businesses to make sales tax payments electronically via the internet.Electronic payments are required if a tax of ten thousand dollars or greater is due, and this is in connection with a return.
You can process your required sales tax filings and payments online using the official bFile Maryland website, which can be found here . You should have received credentials to access your bFile Maryland account when you applied for your Maryland sales tax license.
Simplify Maryland sales tax compliance! We provide sales tax rate databases for businesses who manage their own sales taxes, and can also connect you with firms that can completely automate the sales tax calculation and filing process. Click here to get more information.
Back to Maryland Sales Tax Handbook Top