Maryland Business Tax FAQs
Frequently asked questions about business taxes in Maryland could easily fill many pages, but we will try to cover some of the most common topics here. Business owners often ask about shipping and handling charges, tax exemptions, and resale certificates, by way of example.
A Maryland business tax attorney can answer your specific questions and help you stay in compliance with our state and federal tax regulations. Here are a few Maryland business tax FAQs.
What Does the Taxable Price Include?
If an item is taxable, like the sale of goods, the taxable price includes the full price the purchaser pays. Sales tax can apply to things other than cash when exchanged for goods.
For example, when one person provides services in exchange for goods or the parties barter, the full value of the services or items are taxable. The taxable price does not include things like delivery charges, mandatory gratuity charges for certain groups, and cash discounts.
Does Maryland Impose Sales Tax on Shipping and Handling Charges?
Yes and no. Maryland taxes handling charges as part of the price of purchase. If the seller assesses shipping charges separately from the purchase price, those costs are not subject to sales tax. If the merchant combines the shipping and handling charges, sales tax applies to the total of those expenses.
Does Maryland Have Tax-Free Shopping Dates?
Yes. There are two tax-free shopping time blocks every year in our state. Purchases of certain clothing and footwear items bought during the designated back-to-school tax-free shopping week every August are exempt from sales and use tax.
Also, every February, there is a three-day tax-free weekend for the purchase of selected Energy Star products like LED light bulbs, furnaces, and programmable thermostats.
Can I Accept a Tax Exemption Certificate from Another State?
No, if a church or organization wants to avoid having to pay sales on its purchases from you, they must show you an exemption certificate from the Maryland Comptroller’s Office. Write down the number and expiration date of the exemption certificate on your copy of the sales paperwork. In the alternative, you can go online to verify whether an exemption certificate is current and valid.
Are “Sales Tax Included” Sales Legal in Maryland?
Yes. You must pay the tax on behalf of the purchaser if you absorb all or part of the sales and use tax on retail sales. Also, you must inform the purchaser of the tax at the time of sale.
Do Out-of-State Vendors Have to Register to Collect Sales and Use Taxes?
If you are a non-Maryland vendor who makes sales in Maryland, you must register with the Maryland Comptroller’s Office to collect Maryland sales and use taxes. The Comptroller’s Office will decide whether you have a sufficient connection with Maryland to collect these taxes.
Does the Maryland Comptroller Office Provide Resale Certificates?
No. The Comptroller’s Office does not require a specific form or template for resale certificates. Your resale certificate must include the buyer’s name, address, and Maryland sales and use tax license number, as well as a signed statement you will resell the items purchased or that they will become part of a product that will get resold. You can create your own certificates if they comply with these requirements.
A Maryland business tax attorney can guide you through the business tax issues in our state. Contact Steve Thienel today.
