How Much Is the Sales Tax in Maryland?

Sales tax in Maryland is a consumption tax applied to the sale of goods and certain services within the state. Businesses collect this tax at the point of sale and remit it to the state. Understanding these rules is important for consumers, who pay the tax, and businesses, which collect it. Sales tax revenue funds various state services.

Current Sales Tax Rate

Maryland maintains a statewide sales tax rate of 6% on most taxable purchases. This rate is uniform statewide, with no additional local sales taxes. The 6% rate applies to the taxable price of goods and services.

While the general rate is 6%, certain items are subject to different rates. For instance, alcoholic beverages are taxed at 9%. Short-term passenger vehicle rentals are taxed at 11.5%, while truck rentals are taxed at 8%. Sales of cannabis are subject to a 12% tax, electronic smoking devices at 20%, and vaping liquid at 60%.

Maryland also imposes a use tax on purchases made outside the state for use within Maryland when sales tax was not collected. The use tax rate matches the 6% sales tax rate. Consumers are responsible for remitting this tax directly to the Comptroller of Maryland if the seller did not collect it.

Goods and Services Subject to Sales Tax

Most tangible personal property sold in Maryland is subject to sales tax. This includes common items such as clothing, electronics, furniture, jewelry, vehicles, artwork, and collectibles. Leases and rentals of tangible personal property are also taxable.

Digital products and codes, such as digital music, movies, e-books, video games, and electronically distributed newspapers or magazines, are also taxable. Electricity, natural gas, and hotel stays are considered tangible personal property for tax purposes and are therefore taxable.

Most services in Maryland are not subject to sales tax unless specifically identified by law. However, certain enumerated services are taxable, including:
Custom-made goods (where fabrication services are provided)
Commercial laundry services
Cleaning services for commercial or industrial buildings
Telecommunication services (e.g., mobile phone, prepaid phone, telephone answering services)

Common Sales Tax Exemptions

Maryland provides several common exemptions from sales tax. Most food products purchased for consumption at home, commonly known as groceries, are exempt. This exemption generally applies when the food is sold by a grocery or market business where grocery sales constitute at least 10% of their total food sales, and the food is intended for off-premises consumption.

However, prepared food, such as meals consumed on restaurant premises or takeout items prepared for immediate consumption, is generally taxable. Prescription and over-the-counter drugs are exempt from sales tax, as are medical supplies. Certain agricultural products are also exempt.

Services not specifically listed as taxable by Maryland law are generally exempt, such as most healthcare services. Other exemptions include:
Purchases made using food stamps
Sales to government agencies
Sales to certain nonprofit organizations
Purchases by businesses for resale (with a valid resale certificate)