For entrepreneurs evaluating Maryland as a business location in 2026, the tax landscape is a key factor. With a state sales tax of 6% and potential local additions of up to 0%, the combined rate can reach 6.00%.
Economic Nexus in Maryland
Remote sellers must collect Maryland sales tax if they exceed $100,000 in annual sales or 200 transactions within the state. This threshold has been in effect since 2018-10-01. Marketplace facilitators like Amazon and Etsy are also required to collect and remit tax on behalf of third-party sellers. The Comptroller of Maryland enforces these provisions and provides registration guidance at https://www.marylandtaxes.gov.
LLC Formation in Maryland (2026)
Forming an LLC in Maryland costs $100 for the initial filing. An annual franchise tax of $300 is required to maintain good standing. Maryland imposes a state income tax, which affects pass-through LLC taxation.
The process involves filing Articles of Organization with the Secretary of State, obtaining a federal EIN, and registering for applicable state tax accounts. You will also need a sales tax permit from the Comptroller of Maryland.
Key Tax Rules
• Maryland has a flat 6% state sales tax with no local additions.
• Alcoholic beverages are taxed at 9%.
• Groceries and most clothing are exempt.
• Economic nexus: $100,000 in sales or 200 transactions.
Sales Tax Exemptions
The following categories are generally exempt from sales tax in Maryland: groceries, prescription drugs, medical devices, clothing. Businesses should maintain proper documentation for exempt transactions.