State Sales Tax Nexus and General Overview

Need to Understand a State's Sales Tax Situation? Here it is...

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Maryland (MD)

MD Sales Tax - Name of Tax and General Application:

Maryland imposes a tax on the sale at retail level of tangible personal property in the state. This is called a "sales tax". In addition there is a tax imposed on the use of tangible personal property or taxable services in Maryland. This tax is called a "use tax".

MD Nexus - General Requirements:

The word "nexus" means a link or connection. If you are determined to have nexus to a U.S. state then you are subject to that state's sales and use tax rules and must collect and remit sales tax to the state. This is known as a "filing obligation."

Each state has a different definition of nexus. However, if the answer to any of the following questions is yes, it is likely that a company has nexus as legally defined in most U.S. States.

Does the company own property in the state? Does the company have employees living in the state? Does the company regularly send employees in the state to perform services? Does the company have an agent acting on behalf of the company in the state?

Maryland defines a vendor as a person who engages in business as an out-of-state vendor, a retail vendor, or holds a special license as a vendor. A vendor would include a salesman or other representative who acts as agent with a dealer, distributor or other employer to sell or deliver tangible personal property or services for use in the state. Maintaining a place of business in the state, having an agent or other representative operating in the state or regularly entering the state to provide services or repair for tangible personal property would qualify a vendor for nexus with Maryland therefore subjecting them to sales and use tax.

MD Local Tax - Do Localities Impose Tax?

No, Maryland does not impose local sales tax.

MD Resale Certificate Renewal Agreements:

In Maryland, tax is not due on purchases that are for resale where a resale certificate is provided with all pertinent information required by the state to the seller.

MD Resale Certificate Renewal Periods

The certificate is valid until revoked by the Comptroller or taxpayer according to the Comptroller's office, although this is not specifically stated in any statutes or regulations.

MD Statute of Limitations

Actions to recover sales and use tax may not be brought after four years from the date the tax was due. Refunds may be filed four years after the date the tax was paid. There is no limitation when taxes have been underpaid by 25% or more.