Maryland — Sales & Use Tax

Maryland imposes a sales and use tax on (1) retail sales made in the state, and (2) the use in Maryland of tangible personal property, digital codes, digital products, or taxable services. The statute distinguishes between a sales tax and a use tax, but both fall under the same title and rate structure. A "retail sale" includes the sale of tangible personal property or a taxable service; services are taxable only if specifically enumerated in the statute, whereas sales of tangible personal property are generally taxable unless an exemption applies. The law presumes all transactions are taxable unless a statute provides an exemption.

The general state rate is 6% of the taxable price, applied uniformly statewide with no local add-on taxes. Maryland does impose higher rates on specific categories: 9% on alcoholic beverages, 11.5% on short-term passenger-vehicle rentals, 12% on cannabis (as of fiscal year 2026), and 3% on certain information-technology and data-processing services added in 2025. Vending-machine sales of tangible personal property and taxable services are taxed at 6% applied to a percentage of gross receipts set by statute.

Source: Md. Code Ann., Tax-Gen. § 11-102 Source: Md. Code Ann., Tax-Gen. § 11-104

An out-of-state vendor without physical presence in Maryland must register and collect sales tax if, during the previous or current calendar year, the vendor's gross revenue from sales delivered into Maryland exceeds $100,000 or the vendor completes 200 or more separate transactions into Maryland. The threshold applies to all sales—taxable, exempt, wholesale, and marketplace-facilitated—delivered to Maryland customers. Meeting either the revenue or transaction threshold triggers the registration obligation.

Source: Maryland Comptroller Tax Alert (Sept. 2018)

Maryland imposes a 6% sales and use tax rate on retail sales of tangible personal property, digital products, and taxable services. This rate applies statewide with no additional local or county sales taxes. The statute provides bracket computation details for sales under one dollar and for sales of one dollar or more.

Source: Md. Code Ann., Tax-Gen. § 11-104

A marketplace facilitator must collect Maryland sales and use tax on retail sales or sales for use by marketplace sellers to buyers in Maryland. When the marketplace facilitator collects the tax, the marketplace seller is not required to collect it on that facilitated sale. The buyer pays the tax to the marketplace facilitator at the time of sale, and the facilitator remits it to the Comptroller. This obligation became effective October 1, 2019.

Source: Md. Code Ann., Tax-Gen. § 11-403.1 Source: Maryland Comptroller Tax Alert (Sept. 2019)

Maryland sales and use tax returns are due on or before the 20th day of the month following the reporting period. If the 20th falls on a weekend or Maryland legal holiday, the due date extends to the next business day.

Filing frequency assignment

The Comptroller of Maryland assigns each vendor a filing frequency—monthly, quarterly, semi-annual, or annual—based on the amount of tax the vendor collects. New registrants are initially assigned quarterly filing. The Comptroller evaluates actual payment amounts over time and may change a vendor's filing frequency; the Comptroller notifies the vendor in advance of any change.

The statute does not specify dollar thresholds for each frequency tier. The Comptroller assigns and adjusts filing frequency at its discretion based on the vendor's tax liability.

Quarterly return due dates (for quarterly filers):

• Q1 (Jan–Mar): due April 20
• Q2 (Apr–Jun): due July 20
• Q3 (Jul–Sep): due October 20
• Q4 (Oct–Dec): due January 20 of the following year

Monthly filers report by the 20th of each month for the preceding month. Annual and semi-annual filers follow dates specified by the Comptroller in the vendor's assignment notice.

Electronic filing mandate

Beginning with periods after December 31, 2026, all vendors must file sales and use tax returns electronically through the Maryland Tax Connect portal. Md. Code Ann., Tax-Gen. § 11-502.2, enacted in 2024, imposes this mandate unless the Comptroller grants a waiver for reasonable cause or undue hardship. For periods before January 1, 2027, vendors making payments of $10,000 or more in a single filing must file and pay electronically; electronic filing is encouraged but not universally required for smaller vendors.

Timely-filing discount

A vendor who timely files a sales and use tax return is allowed a credit for the expense of collecting and paying the tax. The credit equals 1.2% of the first $6,000 of tax to be paid with each return, plus 0.9% of the amount above $6,000, up to a maximum of $500 per return. The discount does not apply if the return or payment is submitted after the due date. Md. Code Ann., Tax-Gen. § 11-105(a)–(c).

Zero returns required

A vendor must file a return for every assigned period even if the vendor made no taxable sales during that period. The Business Tax Tip #22 publication instructs vendors to file zero returns to avoid failure-to-file penalties and to keep the account in good standing.

Source: Md. Code Ann., Tax-Gen. § 11-502.1 Source: Md. Code Ann., Tax-Gen. § 11-105 Source: Md. Code Ann., Tax-Gen. § 11-502.2 (2024 Md. Laws Ch. 730, SB 677) Source: Maryland Comptroller Business Tax Tip #22 – Sales and Use Tax FAQs

Maryland requires a sales and use tax license before any vendor may engage in the business of a retail vendor, an out-of-state vendor, or a marketplace facilitator. "Engage in the business of a retail vendor" means to sell or deliver tangible personal property, a digital code, a digital product, or a taxable service in the State. "Engage in the business of an out-of-state vendor" means to sell or deliver tangible personal property or a taxable service for use in the State or a digital product or digital code to a customer tax address in the State.

Who must register

A vendor must obtain a license if any of the following apply:

• The vendor sells or delivers tangible personal property, digital products, digital codes, or taxable services in Maryland (retail vendor).
• The vendor sells or delivers tangible personal property or taxable services for use in Maryland or delivers digital products or digital codes to a customer tax address in Maryland (out-of-state vendor). This includes out-of-state vendors who meet the economic-nexus thresholds: gross revenue exceeding $100,000 or 200 or more separate transactions into Maryland during the previous or current calendar year.
• The vendor operates as a marketplace facilitator and facilitates retail sales to buyers in Maryland.

Physical-presence nexus is established by permanently or temporarily maintaining, occupying, or using any office, sales or sample room, distribution facility, storage warehouse, or other place for the sale of tangible personal property or taxable services directly or indirectly through an agent or subsidiary; having an agent, canvasser, representative, salesman, or solicitor operating in Maryland for the purpose of delivering, selling, or taking orders; or entering Maryland on a regular basis to provide service or repair for tangible personal property or a digital product.

Registration process

Vendors register for a sales and use tax license by filing a Combined Registration Application (CRA) with the Comptroller of Maryland. The CRA allows a vendor to register for multiple Maryland tax accounts simultaneously. New businesses may file the CRA online through Maryland Business Express; new and existing businesses may also register and update account information through the Maryland Tax Connect website. There is no fee for a sales and use tax license.

The application requires the vendor's legal business name, federal employer identification number (FEIN) or Social Security number, business structure (sole proprietorship, LLC, corporation, etc.), physical and mailing addresses, and contact information. Upon approval, the Comptroller issues a Maryland sales and use tax registration number, which is an eight-digit number beginning with zero or one. This number is used on resale certificates, exemption certificates, and sales tax returns.

Timing of registration

A vendor must register before engaging in taxable sales. A vendor who meets the economic-nexus threshold must register immediately upon crossing the threshold. Failure to register timely may result in penalties, back-tax assessments, and interest charges.

Special licenses

Vendors who make sales at roadside or temporary locations (other than sales of produce or seafood, or sales at fairs, trade shows, or flea markets) must also display a transient vendor license. The transient vendor license is free and valid for 90 days, up to the printed expiration date. To obtain a transient vendor license, the vendor must first hold a Maryland sales and use tax license. The transient vendor license is issued automatically upon registration and renewed automatically if the vendor's sales and use tax account remains open and the vendor is not delinquent.

Source: Md. Code Ann., Tax-Gen. § 11-701 Source: Maryland Business Express – Apply for Maryland Tax Accounts Source: Maryland Comptroller Tax Alert (Sept. 2018)

Maryland sales and use tax exemptions are codified in Md. Code Ann., Tax-Gen. §§ 11-201 through 11-243. The state follows the general rule that all retail sales of tangible personal property, digital products, and taxable services are presumed taxable unless a specific statutory exemption applies. Maryland's principal exemptions include sales for resale, agricultural supplies and products, manufacturing equipment, prescription drugs and medical devices, certain food for home consumption, sales to qualifying nonprofit organizations, and sales to governmental entities.

Sales for resale with valid resale certificate

Maryland exempts sales for resale. A vendor may sell tangible personal property, a digital code, a digital product, or a taxable service without collecting sales tax if the purchaser provides a valid resale certificate and the purchaser intends to resell the item in the ordinary course of business. The resale certificate must include the purchaser's Maryland sales and use tax registration number. The vendor must retain the certificate to substantiate the exempt sale. When the purchaser resells the item at retail, the purchaser collects and remits sales tax on that subsequent sale. Md. Code Ann., Tax-Gen. § 11-403.

Food for home consumption

Most food sold in a grocery store or similar retail establishment for consumption off the premises is exempt from sales and use tax under Md. Code Ann., Tax-Gen. § 11-206(a). The exemption covers unprepared food items intended for home consumption. However, the exemption does not apply to:

• Food sold by a restaurant, tavern, or other similar place where food or drink is sold for consumption on or off the premises
• Hot food or beverages sold for immediate consumption
• Food or beverages sold by a delicatessen or other vendor if sold in a heated condition or if two or more food ingredients are mixed or combined by the seller for sale as a single item
• Food sold by a caterer
• Alcoholic beverages

These prepared-food categories remain taxable at the standard 6% rate. The statute defines a "grocery store" narrowly; sales by restaurants and delicatessens of prepared or hot food do not qualify for the exemption.

Agricultural supplies and products

Maryland exempts sales of specific agricultural items for an agricultural purpose under Md. Code Ann., Tax-Gen. § 11-201(a). The exemption covers:

• Livestock
• Feed or bedding for livestock
• Seed, fertilizer, fungicide, herbicide, or insecticide
• Baler twine or wire
• Fuel for use in farm equipment or a farm tractor, as defined in §§ 11–120 and 11–121 of the Transportation Article
• If purchased by a farmer: containers to transport farm products that the farmer raises to market; farm vehicles as defined in § 13–911(c) of the Transportation Article when used in farming; milking machines when used in farming; and fabrication, processing, or service, by a sawmill, of wood products for farm use in which the farmer retains title

Additionally, Maryland exempts sales of agricultural products by a farmer, except for flowers, sod, decorative trees and shrubs, and any other product that usually is sold by a nursery or horticulturist. Md. Code Ann., Tax-Gen. § 11-201(b). The exemption applies to sales by the farmer who produces the product; sales of agricultural products by retailers or intermediaries are not exempt under this provision.

Manufacturing equipment and machinery

Maryland provides a sales and use tax exemption for manufacturing machinery and equipment under Md. Code Ann., Tax-Gen. § 11-212. The exemption applies to "tangible personal property" purchased for use directly and predominantly in production or manufacturing operations in Maryland. The statute defines "production or manufacturing operations" to mean an operation in which tangible personal property is produced or assembled for sale or resale by a manufacturer. The exemption also extends to machinery or equipment used in research and development, or in production agriculture.

The exemption covers parts, materials, and supplies used or consumed in the operation, maintenance, or repair of exempt machinery and equipment. Md. Code Ann., Tax-Gen. § 11-212(c)(1). The statute includes specific definitions and cross-references to qualify equipment; practitioners should consult the full text to determine whether a specific purchase qualifies.

Prescription drugs and medical devices

Maryland exempts prescription drugs dispensed by a licensed pharmacist or authorized health professional upon a valid prescription. The exemption, codified at Md. Code Ann., Tax-Gen. § 11-203(a), applies to "medicine dispensed according to a prescription that is written by a licensed physician, dentist, veterinarian, or other licensed practitioner and filled by a licensed pharmacist or the practitioner who wrote the prescription."

The exemption also covers durable medical equipment and devices when sold on a prescription. Over-the-counter medications and non-prescription health products remain taxable unless another statutory exemption applies.

Sales to qualifying nonprofit organizations

Under Md. Code Ann., Tax-Gen. § 11-204, Maryland exempts sales made to certain nonprofit organizations when the purchase is made to carry on the organization's work. Qualifying organizations under § 11-204(a) include:

• A cemetery company, as described in § 501(c)(13) of the Internal Revenue Code in effect on July 1, 1987
• A credit union organized under the laws of the State or of the United States
• A nonprofit organization that is a charitable, educational, or religious organization, is located in the State (or in an adjacent jurisdiction under reciprocal conditions specified in the statute), is not the United States, and (except for the American National Red Cross) is not a unit or instrumentality of the United States
• A nonprofit incorporated senior citizens' organization (sales not exceeding $500), if the organization is located in the State and receives funding from the State or a political subdivision
• A volunteer fire company or department or volunteer ambulance company or rescue squad located in the State
• A nonprofit parent–teacher association located in the State

To claim the exemption, the nonprofit organization must provide the vendor with a valid exemption certificate issued by the Comptroller of Maryland. The vendor must retain the certificate to substantiate the exempt sale. Md. Code Ann., Tax-Gen. § 11-408(a). Exempt organizations that make sales of goods or taxable services generally must collect and remit sales tax on those sales; the exemption applies to the organization's purchases, not to the organization's sales. Md. Code Ann., Tax-Gen. § 11-408(b) addresses when and how exempt organizations must collect tax on their own sales.

Sales to governmental entities

Sales to the United States government, the State of Maryland, and Maryland political subdivisions (counties, municipalities, and other governmental units) are exempt from sales and use tax under Md. Code Ann., Tax-Gen. §§ 11-204 and 11-205. The exemption applies to sales made directly to the governmental entity for its official use.

Contractors or vendors purchasing materials for use on government projects generally must pay sales tax at the time of purchase unless the sale qualifies under a specific statutory exception. The exemption does not extend to sales to contractors merely because the contractor will incorporate the purchased materials into a government project; the statutory exemption is limited to sales to the governmental entity itself.

Occasional and casual sales

Maryland exempts occasional or casual sales by a person who is not regularly engaged in the business of selling tangible personal property or taxable services. Md. Code Ann., Tax-Gen. § 11-209 provides that the sales and use tax does not apply to a sale if:

• The sale is made by an individual who does not regularly engage in the business of a vendor
• The sales price of the tangible personal property or taxable service is less than $1,000
• The sale is not made through a dealer or auctioneer

For example, an individual selling used personal furniture at a yard sale for $800 need not collect sales tax. The exemption does not apply if the seller regularly makes sales or if the sale is facilitated by a dealer or auctioneer.

Source: Md. Code Ann., Tax-Gen. § 11-201 Source: Md. Code Ann., Tax-Gen. § 11-203 Source: Md. Code Ann., Tax-Gen. § 11-204 Source: Md. Code Ann., Tax-Gen. § 11-205 Source: Md. Code Ann., Tax-Gen. § 11-206 Source: Md. Code Ann., Tax-Gen. § 11-209 Source: Md. Code Ann., Tax-Gen. § 11-212 Source: Md. Code Ann., Tax-Gen. § 11-403 Source: Md. Code Ann., Tax-Gen. § 11-408

Maryland imposes a use tax obligation on purchasers who acquire taxable tangible personal property, digital products, digital codes, or taxable services for use in Maryland when the seller does not collect Maryland sales tax. A buyer who fails to pay the sales and use tax to the vendor at the time of purchase must self-assess and remit use tax directly to the Comptroller of Maryland. This obligation arises most commonly on out-of-state purchases—for example, when a Maryland resident or business purchases goods from an out-of-state vendor who has no collection obligation, or when a Maryland business purchases items online and the seller does not collect Maryland tax.

What triggers the self-assessment obligation

Under Md. Code Ann., Tax-Gen. § 11-601(a), a buyer must self-assess use tax in two circumstances: (1) the buyer fails to pay the sales and use tax to the vendor for any purchase or use subject to the tax as required in § 11-403, or (2) the buyer is required by regulation to file a return for a purchase or use subject to the tax. The buyer must pay the use tax "with the return that covers the period in which the buyer makes that purchase or use." The use tax rate mirrors the sales tax rate—6% for most tangible personal property and taxable services under Md. Code Ann., Tax-Gen. § 11-104, with higher rates for specified categories (9% for alcoholic beverages, 12% for cannabis in fiscal year 2026 and thereafter, and other special rates as enumerated in the statute).

The use tax complements the sales tax: it ensures that Maryland's tax applies to taxable items used in Maryland whether purchased from a Maryland vendor or an out-of-state vendor. If a Maryland purchaser buys equipment from a vendor in another state and the vendor does not collect Maryland tax, the purchaser owes Maryland use tax on that purchase. The use tax base is the purchase price, and the buyer may claim a credit for any sales or use tax paid to another state on the same purchase (discussed below).

Reporting form for individual consumers

Individual consumers who make out-of-state, tax-free purchases subject to Maryland use tax file Maryland Form ST-118, Consumer Use Tax Return. The form is used by individuals who are not registered vendors to report and remit use tax on purchases for which no Maryland tax was collected at the time of sale. Form ST-118 instructs the filer to report the total purchase amount subject to use tax, calculate the tax at the applicable rate, claim any credit for sales or use tax paid to another state (Line 4), and remit the net use tax due.

The form includes separate lines for purchases subject to different rates: Line 2A covers use tax on purchases subject to the 6% rate (excluding digital products, electricity for electric-vehicle charging, and racehorses sold after a claiming race). Additional lines cover purchases subject to the 9% alcoholic beverage rate, 12% cannabis rate, and other special categories. The instructions to Form ST-118 explain that a filer who pays late must add interest and a penalty: a 10% penalty on the use tax owed, and interest (which varies by period; the form states a rate of 0.9568% per month or fraction of a month for periods on or after January 1, 2025, and directs filers to visit marylandcomptroller.gov for rates applicable to periods beginning January 1, 2026).

The form itself does not specify a filing frequency or due date on its face; instead, it contains a "Period Ending (MM/YYYY)" field. Maryland Comptroller practice (reflected in agency FAQs and instructional materials) has historically required quarterly filing, with returns due on the 20th of the month following the end of each calendar quarter (April 20 for Q1, July 20 for Q2, October 20 for Q3, and January 20 of the following year for Q4), but practitioners should verify the current filing-frequency requirement with the Comptroller's published guidance or the taxpayer's specific filing assignment.

Registered vendors' use tax obligations

Businesses that hold a Maryland sales and use tax license and are already required to file regular sales and use tax returns do not file Form ST-118. Instead, these businesses report their self-assessed use tax on their regular vendor sales and use tax return (Maryland Form ST-1 or through Maryland Tax Connect). Md. Code Ann., Tax-Gen. § 11-601(b)(2) requires a vendor who, under a direct payment permit, makes a purchase or use subject to the sales and use tax to pay the tax with the return that covers the period in which the vendor makes that purchase or use. Vendors must track taxable purchases on which no sales tax was collected and self-assess use tax on those items on the same return used to remit collected sales tax. The vendor's filing frequency—monthly, quarterly, semi-annual, or annual—is assigned by the Comptroller based on the vendor's tax liability (see the "Filing frequency and due dates" section of this guide for vendor return requirements).

Personal liability and enforcement

Md. Code Ann., Tax-Gen. § 11-601(c)(1) extends personal liability to a buyer for tax that the buyer does not pay either (i) to the vendor as required in § 11-403, or (ii) to the Comptroller as required by regulation. The Comptroller of Maryland administers the use tax and may audit purchasers to verify compliance. A buyer who fails to self-assess and remit use tax when required is personally liable for the tax, plus applicable interest and penalties.

Credit for tax paid to another state

Maryland allows a credit against use tax for sales or use tax legally paid to another state on the same purchase. Form ST-118, Line 4, instructs the filer to "Enter the amount of sales and use tax you paid to another state on the purchases for use you reported on Line 1," and then to subtract that credit from the calculated Maryland use tax. The credit is capped at the amount of Maryland use tax that would otherwise be due. For example, if a Maryland resident purchases equipment in Delaware (which has no sales tax) and brings it into Maryland, the full Maryland use tax is owed with no credit available. If the same resident purchases equipment in Pennsylvania and pays Pennsylvania's 6% sales tax, Maryland allows a credit for the 6% Pennsylvania tax, which in that case would offset the Maryland use tax entirely (since both rates are 6%). If the other state's rate is lower than Maryland's, the Maryland purchaser owes the difference. Registered vendors claim the same credit on their regular vendor return.

Source: Md. Code Ann., Tax-Gen. § 11-601 Source: Md. Code Ann., Tax-Gen. § 11-104 Source: Maryland Form ST-118, Consumer Use Tax Return (2025)

Maryland imposes statutory time limits, penalty provisions, and interest charges that govern sales and use tax assessments, collections, and enforcement. Understanding these rules is essential for vendors facing audits, assessments, or collection actions.

Statute of limitations for assessment

Under Md. Code Ann., Tax-Gen. § 13-1102(a), an action to recover sales and use tax may not be brought after 4 years from the date on which the tax is due. This is Maryland's assessment statute of limitations: the Comptroller generally has four years from the return due date to assess additional tax through an audit or deficiency determination. Md. Code Ann., Tax-Gen. § 13-1102(b) provides that the limitations period in subsection (a) does not apply when a buyer or vendor fails to file a return or files a false or fraudulent return with intent to evade tax. In those circumstances, the Comptroller may assess at any time.

Statute of limitations for collection

Md. Code Ann., Tax-Gen. § 13-1103(a) provides that a sales and use tax may not be collected after 10 years from the date the tax is due. Md. Code Ann., Tax-Gen. § 13-1103(c)(1) further provides that if an assessment of any tax has been made within the applicable assessment limitation period, the tax may not be collected after 10 years from the date of the assessment. This 10-year collection period is Maryland's enforcement window once a liability is established. If a receiver or trustee is appointed to complete tax collection within the 10-year period specified in subsection (a), the period for collecting the tax extends for 2 years from the date that the receiver or trustee is appointed. Md. Code Ann., Tax-Gen. § 13-1103(b).

Interest on unpaid tax

Maryland charges interest on unpaid sales and use tax from the original due date of the return until the tax is paid. The annual interest rate is set each calendar year by the Comptroller. For calendar year 2025, the annual interest rate is 11.4825%, which equals 0.9568% per month or fraction of a month. The Comptroller publishes a new annual rate for each succeeding calendar year on the Comptroller's website. Interest accrues automatically on any unpaid balance, including unpaid tax shown on a timely filed return, deficiency assessments, and use tax that a purchaser failed to self-assess. Interest is also due on unpaid penalty amounts. The instructions to Maryland Form ST-118 (Consumer Use Tax Return) state that for periods on or after January 1, 2025, interest is calculated at a rate of 0.9568% per month or fraction of a month, and direct taxpayers to visit marylandcomptroller.gov for rates beginning January 1, 2026.

Penalties for late filing and late payment

Maryland Form ST-118 (Consumer Use Tax Return) instructs taxpayers to add a 10% penalty on the use tax owed if the return or payment is submitted after the due date. This 10% late-payment penalty applies to sales and use tax returns filed after the due date. The penalty is calculated on the net tax due (after credits) and is added to the amount owed.

Maryland statutes in Title 13, Subtitle 7 of the Tax-General Article address penalties for various tax compliance failures. Md. Code Ann., Tax-Gen. § 13-701(a) provides that a person who fails to file a return or report required by the Tax-General Article is subject to a penalty. Md. Code Ann., Tax-Gen. § 13-702(a) imposes a penalty for failure to pay an assessment when due. Md. Code Ann., Tax-Gen. § 13-704 imposes enhanced penalties for fraudulent failure to file a return. These penalty provisions apply to sales and use tax administered by the Comptroller. The specific penalty percentages and calculation methods for sales and use tax non-compliance are set forth in these statutes and in administrative guidance, including the instructions to Form ST-118 and other Comptroller publications.

Penalty waiver and abatement authority

Md. Code Ann., Tax-Gen. § 13-802 grants the Comptroller authority to compromise a tax liability, abate an assessment, or remit or cancel a penalty or interest charge. Under § 13-802(a), the Comptroller may exercise this authority if the Comptroller determines that:

• collection of the tax, interest, or penalty would be inequitable;
• the person's failure to comply with a requirement of the Tax-General Article was due to reasonable cause and not willful neglect; or
• the interest or penalty to be remitted or canceled is attributable to erroneous advice or information given to the person by an officer or employee of the Comptroller.

A taxpayer seeking penalty or interest abatement must submit a written request to the Comptroller. The Comptroller's decision on a waiver request is discretionary. The statute does not define "reasonable cause" or establish a specific list of qualifying circumstances. Interest abatement is authorized only in the limited circumstances enumerated in § 13-802, such as when the delay in payment was attributable to erroneous advice from the Comptroller or when the assessment itself is reduced or canceled.

Procedure for protesting or appealing an assessment

A taxpayer who receives a sales and use tax assessment and disagrees with the amount or basis of the assessment may file a protest and request a hearing. Md. Code Ann., Tax-Gen. § 13-508 governs the protest and hearing procedure for sales and use tax assessments. A taxpayer must file the protest within 30 days of the date of the assessment notice. The protest is submitted to the Comptroller, and the Comptroller will schedule an informal hearing before a hearing officer. At the hearing, the taxpayer may present evidence and make legal arguments. The hearing officer issues a written decision.

A taxpayer dissatisfied with the Comptroller's final determination following the informal hearing may appeal to the Maryland Tax Court. Md. Code Ann., Tax-Gen. § 13-532 provides that an appeal to the Tax Court must be filed within 30 days of the date of the final determination by the Comptroller. If the taxpayer does not file a timely protest within 30 days of the assessment notice, the assessment becomes final, and the Comptroller may proceed with collection through wage garnishment, bank levy, lien filing, or referral to an external collection agency.

Zero-return filing and failure-to-file penalties

A vendor assigned a sales and use tax filing frequency must file a return for every assigned period even if the vendor made no taxable sales during that period. Failure to file a required return—including a zero return—may result in a failure-to-file penalty and interest charges on any estimated tax the Comptroller assesses. Maryland Comptroller Business Tax Tip #22 instructs vendors to file zero returns to avoid failure-to-file penalties and to keep the account in good standing.

Source: Md. Code Ann., Tax-Gen. § 13-1102 Source: Md. Code Ann., Tax-Gen. § 13-1103 Source: Md. Code Ann., Tax-Gen. § 13-508 Source: Md. Code Ann., Tax-Gen. § 13-532 Source: Md. Code Ann., Tax-Gen. § 13-701 Source: Md. Code Ann., Tax-Gen. § 13-702 Source: Md. Code Ann., Tax-Gen. § 13-704 Source: Md. Code Ann., Tax-Gen. § 13-802 Source: Maryland Tax Alert – Sales and Use Tax Updates 2025–2026 (2025) Source: Maryland Form ST-118, Consumer Use Tax Return (2025) Source: Maryland Comptroller Business Tax Tip #22 – Sales and Use Tax FAQs