Taxes

The State of Maryland offers a variety of tax exemptions and credits, including exemptions targeted at making the state and Baltimore one of the nation’s – and world’s – most business-friendly tax climates. A full report on competitive business locations, including full rankings, can be found on KPMG’s website. Comprehensive information about all taxes in the State of Maryland can be found through the Comptroller of Maryland and the Department of Assessments and Taxation. Information on tax incentives can be found at Incentives and Financing.

Income Tax

Every corporation and association generating income allocable to the State of Maryland is required to file an income tax return with the state. The tax rate is 7.0 percent of net income allocable to Maryland. All counties in the Baltimore region impose a personal income tax. It is administered and collected by the state and is applied to state taxable income. Additional information on corporate taxes is also available through the Comptroller of Maryland.

Sales Tax

The Maryland sales and use tax is set at a rate of 6% and is imposed upon the sale or use of tangible personal property and select services. Maryland’s counties or municipalities impose no general sales or use taxes. Further information on the sales and use tax can be found via the Maryland Department of Business and Economic Development.

Property Tax

Real property in Maryland is appraised at market value and taxed on assessed value. State and local property taxes are applied to assessed value of real property. There is no tax on business personal property in Maryland. All regional counties and Baltimore City levy taxes on the depreciated value of business personal property.

Other Fees & Taxes

Maryland requires that businesses obtain a license and pay a fee to create and operate certain businesses in the state. Fees vary depending on the location and type of your business. Please refer to the U.S. Chamber of Commerce for details on fees.

Unemployment Insurance

Upon establishing a new business in Maryland, employers are required to apply for an unemployment insurance account number. There is no employee contribution. Complete and detailed information is available at the Maryland Department of Labor, Licensing and Regulation, Division of Unemployment Insurance.

Workers' Compensation

All employers in Maryland are required to provide workers’ compensation coverage for their employees. Workers’ compensation may be provided in a variety of ways, and insurers offer very competitive rates. Information is available from the Maryland Department of Business and Economic Development.