How to Get Maryland Sales Tax Permit | A Comprehensive Guide

Maryland Sales Tax Permit

Have you ever wondered what a sales tax permit is in Maryland? If you don’t, then we will guide you through it. In Maryland, a sales tax permit, also known as a seller’s permit, is a legal document that allows businesses, specifically Maryland LLC, to collect and remit sales tax to the Maryland government. This permit ensures businesses operate legally and have the necessary permissions to conduct sales within a particular state. Maryland has its own rules and regulations surrounding sales tax permits. Business owners must familiarize themselves with the requirements and processes to comply with the law.

In this comprehensive guide, Webinarcare Editorial Team will walk you through everything you need to know about obtaining and maintaining Maryland Sales Tax Permit. From understanding the basics of sales tax to the intricacies of the application process, we have got you covered. You must be guided by all the factors gathered in this article.

What is a Sales Tax Permit?

A sales tax permit is Maryland-issued license that allows businesses to collect and remit sales tax on the goods and services they sell. This permit ensures Maryland businesses operate legally and have the necessary permissions to conduct sales within a particular state. In Maryland, a sales tax permit is required for businesses that sell taxable goods or services and are required to collect sales tax from their customers.

Who Needs a Sales Tax Permit?

Not all businesses need a sales tax permit. Typically, businesses that sell tangible personal property or taxable services to customers within Maryland require a sales tax permit. This includes brick-and-mortar stores, online retailers, and service providers. Maryland may also require sales tax permits for businesses that sell certain types of products or services, such as alcohol or tobacco. If you plan to start a bakery business in Maryland, you typically need a sales tax permit to collect and remit sales tax on the items you sell.

If your business operates in multiple states or forms a foreign LLC in Maryland, you may need to obtain a sales tax permit for each state with a sales tax nexus. A sales tax nexus is a connection or presence a business has within a state that requires them to collect and remit sales tax. Factors that can create a nexus include the following:

  • Physical location
  • Employees
  • Inventory within a state

Obtaining a sales tax permit in Maryland is not just about complying with regulations, but about seizing the opportunity to grow and thrive in the market. To start an LLC must be a gateway to establish a legitimate business presence and to build trust with customers. Embrace this essential step, for it paves the path towards success and prosperity.

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How to Get a Sales Tax Permit in Maryland

The process for obtaining a sales tax permit varies from state to state. Generally, Maryland businesses must apply through the Maryland Comptroller of Maryland. The following steps provide an overview of the application process:

Step 1: Determine If You Need a Sales Tax Permit 

Before applying, determine if your Maryland business needs a sales tax permit based on the goods or services you sell and where you operate.

Most Maryland businesses that sell tangible goods or services must have a sales tax permit. This includes:

  • Retailers – businesses that sell goods directly to consumers, such as clothing stores, grocery stores, and electronics stores.
  • Service Providers – businesses that provide services, such as hair salons, auto repair shops, and landscaping companies.
  • Wholesalers – businesses that sell goods to other businesses, such as distributors and manufacturers.
  • Online Sellers – businesses that sell goods or services online, including Maryland E-commerce and online marketplaces.

Step 2: Register Your Maryland Business

Register your business in Maryland if you still need to. This may involve obtaining an Employer Identification Number (EIN) in Maryland from the Internal Revenue Service and registering your business name with the Maryland Secretary of State. 

Your Maryland business name should be unique, memorable, and reflective of your products or services. There is a complete guide on Maryland Business Name Search for a proper Maryland business name. You can also check the availability of your desired business name by searching the Maryland Business Express‘s website.

In obtaining an EIN, it can be done through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

Complete the registration for a legal Maryland business if you plan to sell tangible goods. 

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom – ($0 + State Fee for LLC formation)

Step 3: Gather The Necessary Information

The next step is to collect the required information for the Maryland sales tax permit application. To obtain a sales tax permit in Maryland, you will need to gather the following necessary information:

  1. Business Details: Provide the legal name, mailing address, and contact information of your business, including your Maryland DBA (Doing Business As) names.
  2. Entity Type: Indicate whether your business is a sole proprietorship, partnership, corporation, LLC, or legal entity.
  3. EIN/SSN: Have your Employer Identification Number (EIN) or Social Security Number (SSN) ready. This identification is required to associate the sales tax permit with your business.
  4. Purpose of Permit: Explain the nature of your business activities, such as retail sales, wholesale, manufacturing, or service, to determine the appropriate sales tax category.
  5. Product/Service Description: Provide a brief description of the goods or services your business offers, including any unique details that may impact the sales tax requirements.
  6. Nexus Information: Identify if your business has a physical presence or nexus in Maryland, such as a brick-and-mortar location, employees, or inventory storage.
  7. Estimated Sales: Estimate your expected monthly or annual sales volume in Maryland to determine the appropriate tax registration and reporting requirements.
  8. Previous Registration: If you are already registered for sales tax in another state, provide details to determine if any reciprocal agreements or exemptions apply.
  9. Supporting Documents: Some states may require additional documentation, such as a copy of your business license, federal tax returns, or a certificate of authority.
  10. Fee Payment: Be prepared to pay the required fee for obtaining a sales tax permit in Maryland.

It’s important to note the exact requirements and processes in Maryland. It is recommended to visit the official website of the Maryland Comptroller of Maryland or consult with a tax professional for accurate and up-to-date information.

Step 4: Complete The Application

Fill out the sales tax permit application form for Maryland, either online or by paper. Be prepared to answer questions about your business operations, products, and services. You can register your Maryland sales tax permit in Interactive Web Services.

Step 5: Pay Any Required Fees

In Maryland, the state permit may charge a fee for obtaining a sales tax permit. Be prepared to pay this fee when submitting your application. Usually, it costs $0 (Free). 

Step 6: Submit The Application

Submit your completed application, along with the required fee of $0 (Free), to the Maryland Comptroller of Maryland.

Step 7: Receive Your Permit

Once your application is approved, you will receive your sales tax permit. This may be a physical document or an electronic certificate you can print. 

How to Maintain a Sales Tax Permit

After obtaining a sales tax permit, Maryland businesses must maintain compliance with Maryland sales tax laws. This typically involves the following steps:

  • Collect Sales Tax: Collect sales tax from customers on taxable goods and services. Be sure to charge the correct sales tax rate based on your and your customer’s locations. The sales tax rate in Maryland is 6.00%. 
  • Keep Accurate Records: Maintained detailed records of all sales transactions, including the amount of sales tax collected. This information will be required when filing your sales tax returns. Hire a certified public accountant (CPA) to keep track of records. 
  • File Sales Tax Returns: File sales tax returns with Maryland, typically monthly, quarterly, or annually, depending on your sales volume and Maryland requirements. Be sure to remit the sales tax collected during the reporting period.
  • Renew your Permit: Maryland requires businesses to renew their sales tax permits periodically. Know your state’s renewal requirements and complete the necessary steps to maintain your permit.

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Penalties for Non-Compliance

Failure to obtain or maintain a sales tax permit can seriously affect a business. Penalties for non-compliance can include fines, penalties, interest charges, and even the revocation of your business license. Additionally, Maryland businesses that fail to collect and remit the Maryland sales tax may be held personally liable for the unpaid taxes.

Do I Need a Sales Tax Permit If I Only Sell Online?

You likely need a sales tax permit if you sell taxable goods or services online and have a sales tax nexus in Maryland. To have a Home-Based Business in Maryland, you must still file and maintain a sales tax permit. 

How Long Does Obtaining a Sales Tax Permit Take?

The processing time for sales tax permit applications takes time. In Maryland, they may issue permits within a few days, while others may take several weeks. Be sure to apply well in advance of when you plan to start selling taxable goods or services.

Can I Have Multiple Sales Tax Permits?

Businesses that operate in multiple states or sell different types of products may need multiple sales tax permits. Be sure to research the specific requirements for each state and product type. Having a foreign LLC is not quite easy since you still need to hire a Resident Agent, file for the Articles of Organization of the state you wish to operate your business, and also, you need to have multiple sales tax permits. 

How Much Does a Sales Tax Permit Cost?

The costs and requirements for obtaining a sales tax permit vary depending on the state. To find accurate information about the cost of a sales tax permit in Maryland, you can visit the Maryland Comptroller of Maryland’s website or consult with a tax professional or accountant familiar with your state’s regulations. They can provide the most up-to-date information on the costs and requirements for obtaining a sales tax permit in Maryland.

FAQs

How do I obtain a sales tax permit in Maryland?
You can apply for a sales tax permit online through the Maryland Comptroller’s website or by filling out a paper application.
Who needs a sales tax permit in Maryland?
If you sell tangible personal property in Maryland, you may be required to obtain a sales tax permit.
Do I need a sales tax permit to sell at craft shows in Maryland?
Yes, if you are selling tangible goods at a craft show in Maryland, you may need to obtain a sales tax permit.
Is there a fee to apply for a sales tax permit in Maryland?
No, there is no fee to apply for a sales tax permit in Maryland.
What information do I need to provide when applying for a sales tax permit in Maryland?
You will need to provide basic business information, such as your name, business name, address, and federal tax ID number.
How long does it take to get a sales tax permit in Maryland?
It generally takes between 7-10 business days for the Maryland Comptroller’s office to process your application.
Is a sales tax permit required for online sales in Maryland?
Yes, if you are an online seller with a nexus or physical presence in Maryland, you are required to obtain a sales tax permit.
Do I need a sales tax permit for purchases made from wholesale suppliers as a business owner in Maryland?
Yes, if you plan to resell the items you purchase wholesale, you are required to obtain a sales tax permit.
How often do I need to renew my sales tax permit in Maryland?
Sales tax permits in Maryland do not need to be renewed as long as you continue to make sales.
What happens if I fail to obtain a sales tax permit in Maryland?
You may be subject to fines and penalties for not obtaining a sales tax permit in Maryland.
Is it possible to apply for a temporary sales tax permit in Maryland?
No, Maryland does not offer temporary sales tax permits.
How can I verify that a business has a valid sales tax permit in Maryland?
You can verify a Maryland sales tax permit through the state’s online Business Taxpayer Lookup tool.
Is there a sales tax exemption in Maryland?
Yes, there are a number of sales tax exemptions in Maryland for certain goods and services, including groceries and prescription drugs.
What is the sales tax rate in Maryland?
The sales tax rate in Maryland is 6 percent, with some local jurisdictions also imposing additional taxes.
Can I apply for a sales tax permit in Maryland if I have a criminal record?
You may still be able to obtain a sales tax permit in Maryland even if you have a criminal record, but it will depend on the nature of the offense.
Can I use a sales tax permit from another state in Maryland?
No, you must obtain a sales tax permit from the state where your business is located.
Do I need to collect sales tax on goods sold to other businesses in Maryland?
Yes, you are required to collect sales tax on goods sold to other businesses in Maryland, unless they present you with a valid reseller’s license.
What if I sell goods at a loss in Maryland?
Even if you sell goods at a loss in Maryland, you are still required to collect and remit sales tax on the transaction.
How do I collect and remit sales tax in Maryland?
Sales tax collected must be remitted to the Maryland Comptroller’s office on a regular basis, either monthly, quarterly, or annually, depending on the volume of sales.
What happens if I collect sales tax but don’t remit it to the state?
Failure to remit sales tax collected can result in penalties and legal consequences.
Are there any exemptions for small businesses in Maryland when it comes to sales tax?
There are no special exemptions for small businesses when it comes to sales tax in Maryland.
Can a sales tax permit be transferred if I buy or sell a business in Maryland?
No, a sales tax permit cannot be transferred between businesses, and a new permit must be obtained.
Am I required to have a physical store in Maryland in order to obtain a sales tax permit?
No, you do not need to have a physical store in Maryland in order to obtain a sales tax permit.
What are the penalties for not collecting sales tax on sales made in Maryland?
Fines and other penalties may be imposed for failing to collect sales tax on goods sold in Maryland.
Can I apply for a sales tax permit in Maryland as an individual?
Yes, individuals may apply for sales tax permits in Maryland for selling goods or other taxable services.
Do I have to charge sales tax if I sell my own art and prints online in Maryland?
If you are selling tangible personal property in Maryland, you are required to collect and remit sales tax on those items.
Are there any deadlines for filing sales tax returns in Maryland?
Sales tax returns in Maryland must be filed by the 20th of the month following the close of the reporting period.
Can I apply for a sales tax permit in Maryland if I don’t have a federal tax ID number?
No, you must first obtain a federal tax ID number in order to apply for a sales tax permit in Maryland.
Can I register for a sales tax permit in Maryland in person?
No, you cannot register for a sales tax permit in person.
How much does it cost to obtain a sales tax permit in Maryland?
There is no fee to obtain a sales tax permit in Maryland.
Does my business need a sales tax permit in Maryland?
If you sell tangible personal property in Maryland, you generally need a sales tax permit.
Can I use my sales tax permit from another state in Maryland?
No, you cannot use a sales tax permit from another state in Maryland.
Do I have to renew my sales tax permit in Maryland?
No, you do not have to renew your sales tax permit in Maryland.
Can I register for a sales tax permit in Maryland before I start my business?
Yes, you can register for a sales tax permit in Maryland before you start your business.
How long does it take to obtain a sales tax permit in Maryland?
It usually takes 2-3 weeks to obtain a sales tax permit in Maryland.
What kind of information do I need to provide to obtain a sales tax permit in Maryland?
You need to provide details about your business, including the type of business, your address, and your Tax ID number.
Do I have to display my sales tax permit in Maryland?
No, you do not have to display your sales tax permit in Maryland.
Can I sell in Maryland without a sales tax permit?
No, you cannot sell in Maryland without a sales tax permit.
How often do I have to file sales tax returns in Maryland?
You have to file sales tax returns in Maryland on a monthly, quarterly, or annual basis, depending on the amount of sales tax you collect.
When are sales tax returns due in Maryland?
Sales tax returns are due on the 20th of each month in Maryland.
Can I file my sales tax returns online in Maryland?
Yes, you can file your sales tax returns online in Maryland.
Do I have to include sales tax on my invoices in Maryland?
Yes, you have to include sales tax on your invoices in Maryland.
Can I apply for a sales tax exemption in Maryland?
Yes, you can apply for a sales tax exemption in Maryland if you meet certain requirements.
What types of businesses are exempt from sales tax in Maryland?
There are certain types of businesses that are exempt from sales tax in Maryland, including non-profit organizations and businesses that sell directly to the government.
Can I sell online in Maryland without a sales tax permit?
No, you cannot sell online in Maryland without a sales tax permit.
Can I cancel my sales tax permit in Maryland if I stop doing business?
Yes, you can cancel your sales tax permit in Maryland if you stop doing business.
What should I do if I collect sales tax but don’t have a sales tax permit in Maryland?
You should immediately apply for a sales tax permit in Maryland and pay any tax owed.
Can I apply for a sales tax permit in Maryland over the phone?
No, you cannot apply for a sales tax permit in Maryland over the phone.
Do I have to collect local sales tax in addition to state sales tax in Maryland?
Yes, you have to collect local sales tax in addition to state sales tax in Maryland.
Is there a penalty for late sales tax returns in Maryland?
Yes, there is a penalty for late sales tax returns in Maryland.
Can I pay sales tax online in Maryland?
Yes, you can pay sales tax online in Maryland.
Can I request a payment plan for sales tax owed in Maryland?
Yes, you can request a payment plan for sales tax owed in Maryland.
How do I report and pay use tax in Maryland?
You can report and pay use tax on your sales tax return in Maryland.
Can I outsource sales tax filing in Maryland?
Yes, you can outsource sales tax filing in Maryland.
What are the penalties for not having a sales tax permit in Maryland?
The penalties for not having a sales tax permit in Maryland include fines and legal action.

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Conclusion

Obtaining and maintaining a sales tax permit is crucial to running a compliant and successful business. By understanding the requirements and processes in Maryland, you can ensure that your business collects and remits sales tax correctly and avoids any penalties for non-compliance. Consulting with a tax professional or Maryland attorney is recommended to ensure that your Maryland business meets all necessary sales tax requirements.

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