Last updated: May 3, 2026

Starting a Business in Maryland: Licenses, Permits & Requirements (2026)

Five things make Maryland different from most other states when you are starting a business here. First, Maryland layers a local “piggyback” county income tax on top of the state graduated PIT — combined effective rates run roughly 4.25% to 9.45% depending on where your owners live, and that local tax is mandatory in every one of Maryland’s 23 counties plus Baltimore City. Most US states have no local income tax at all. Second, Maryland’s state Family and Medical Leave Insurance (FAMLI) program was delayed again in 2025 — under HB 102 signed by Governor Wes Moore on May 6, 2025, payroll contributions now begin January 1, 2027 (originally July 1, 2025) and benefits begin January 2028 (originally July 1, 2026). Third, Maryland’s annual Personal Property Return through SDAT carries a $300 base fee — among the highest annual filing fees in the country, although MarylandSaves participants get the fee waived. Fourth, Maryland’s 6% state sales tax has no local sales tax add-on, which is genuinely simpler than Pennsylvania, Virginia, or most surrounding states. Fifth, Maryland is an all-party (two-party) consent recording state under MD Code, Cts. & Jud. Proc. § 10-402 — felony exposure for unauthorized recordings, which is critical for any service business that takes customer phone calls.

This guide compiles the specific Maryland agency requirements, portal links, fee amounts, and city/county-level variations that apply to starting a business in Maryland in 2026. The source agencies referenced are the Maryland State Department of Assessments and Taxation (SDAT), the Comptroller of Maryland, the Maryland Department of Labor (DLLR), the Maryland Department of Commerce, the Maryland Workers’ Compensation Commission, and the relevant industry boards under DLLR’s Division of Occupational and Professional Licensing.

Maryland Business Requirements at a Glance

Requirement	Agency / Portal	Cost	Timeline
LLC Articles of Organization	Maryland Business Express (SDAT)	$100 standard; $150 expedited	Same-day with expedited; 7-10 business days standard
Annual Report & Personal Property Return	SDAT	$300/year (waived for MarylandSaves participants)	Due April 15 every year
Trade Name (DBA)	SDAT	$25 ($75 expedited); 5-year renewal at same fee	1-2 weeks standard
Federal EIN	IRS.gov	Free	Immediate online
Sales & Use Tax License	Comptroller of Maryland — Maryland Tax Connect	Free	Required before collecting 6% sales tax
Employer Withholding (state PIT + county)	Comptroller of Maryland	Free registration	Register before first payroll
Unemployment Insurance (UI)	Maryland Department of Labor — Division of Unemployment Insurance	2026 wage base $8,500; new employer rate per Table	Register before first payroll
Workers’ Compensation Insurance	Private insurer or Chesapeake Employers Insurance (CEIWC)	Varies by payroll and class code	Required before first employee’s first day
Local Trader’s License (retail / many services)	Clerk of the Circuit Court (county-by-county)	Inventory-based scale	Before opening retail operations
FAMLI registration (when active)	Maryland FAMLI — Maryland Department of Labor	0.9% of wages split 0.45%/0.45% (15+ employees); contributions begin 1/1/2027	Register before contribution start

How to Start a Business in Maryland (Step by Step)

Step 1: Form Your Maryland LLC Through SDAT

File Articles of Organization online through Maryland Business Express, the unified portal operated by the Maryland State Department of Assessments and Taxation (SDAT). Cost: $100 standard, $150 expedited. Expedited filings are typically approved same business day; standard processing takes 7-10 business days.

Your LLC name must include “LLC,” “L.L.C.,” or “Limited Liability Company” and must be distinguishable from existing entity names in the SDAT database. Run a name search on Maryland Business Express before filing.

Resident agent: Maryland uses the term “resident agent” rather than “registered agent.” Your LLC must designate a resident agent with a physical street address in Maryland (no P.O. boxes). You may serve as your own resident agent if you have a Maryland physical address, or hire a third-party service.

Trade Name (DBA): If you operate under a name different from your LLC’s legal name, file a Trade Name registration with SDAT for $25 ($75 expedited). Maryland trade names are valid for 5 years and renew at the same fee.

Get your federal EIN immediately at IRS.gov — free, instant. You need it before opening a business bank account, registering for state taxes, or hiring employees.

Step 2: File the Annual Report and Personal Property Return Every Year

Every Maryland business entity must file an Annual Report and Personal Property Return with SDAT. This is not the same as a routine “annual report” in most other states — it is a combined entity-status filing and personal property tax declaration. Filing details:

• Due date: April 15 every year (uniform statewide deadline, not anniversary-based)
• Standard filing fee: $300/year for most domestic and foreign entities — among the highest annual entity filing fees in the country
• MarylandSaves auto-waiver: If your business offers a qualifying retirement plan or participates in MarylandSaves (the state’s auto-IRA program), the $300 fee is automatically waived. Many Maryland small businesses use this to eliminate the cost — set up MarylandSaves payroll deductions and the waiver applies for the next reporting cycle
• Personal property tax: If your LLC owns business personal property (equipment, furniture, inventory) over de minimis thresholds, the Personal Property Return triggers an assessment from your local government. Most service businesses (cleaning, landscaping, food trucks) end up paying very little. Inventory-heavy businesses pay more
• Penalty for late or missed filing: Forfeiture of good standing, then administrative dissolution. Restoration requires a separate revival filing

Step 3: Register for Maryland State Taxes

Register with the Comptroller of Maryland through Maryland Tax Connect (the Combined Registration Application). A single registration covers all state tax accounts you need: sales and use tax, employer withholding, unemployment insurance, admissions and amusement tax, and tire recycling fee where applicable.

Maryland Sales and Use Tax

Maryland’s state sales tax rate is a flat 6% on most retail sales of tangible personal property and on certain enumerated services. Critically:

• NO local sales tax add-on. Unlike Virginia, Pennsylvania, or most other states, Maryland counties and Baltimore City do not impose local sales tax. The 6% you collect at point-of-sale is the entire state and local sales tax burden — significantly simpler than navigating multiple local jurisdictions
• 9% rate on alcoholic beverages sold for consumption (separate higher rate, must be tracked separately)
• Reduced 3% rate applied effective July 1, 2025 to B2B sales of computing infrastructure, data processing, and web hosting under HB 1515 of 2024
• Cleaning and janitorial services for commercial or industrial buildings ARE taxable at 6% — but residential cleaning is exempt. This is one of the most important splits to get right, see the Maryland cleaning service guide
• Most other services are NOT taxed in Maryland (haircuts, food truck meals subject to general 6% as prepared food, landscaping not taxed at state level, HVAC labor not taxed but parts taxed)

Maryland State Personal Income Tax (PIT)

Maryland uses a graduated personal income tax with rates that changed for 2026 under the FY 2026 Budget Reconciliation and Financing Act. The state PIT structure for 2026:

2026 Single Filer Bracket	2026 MFJ Bracket	Rate
$0 – $1,000	$0 – $1,000	2.00%
$1,001 – $2,000	$1,001 – $2,000	3.00%
$2,001 – $3,000	$2,001 – $3,000	4.00%
$3,001 – $100,000	$3,001 – $150,000	4.75%
$100,001 – $125,000	$150,001 – $175,000	5.00%
$125,001 – $150,000	$175,001 – $225,000	5.25%
$150,001 – $250,000	$225,001 – $300,000	5.50%
$250,001 – $500,000	$300,001 – $600,000	5.75%
$500,001 – $1,000,000	$600,001 – $1,200,000	6.25% (NEW for 2026)
$1,000,001 +	$1,200,001 +	6.50% (NEW for 2026)

The 2025 legislative session created two new top brackets at 6.25% and 6.5%, layered on top of the existing 5.75% top rate. The session also imposed a 2% surtax on capital gains for taxpayers with federal AGI over $350,000, effective for 2026 returns. The standard deduction was increased to $3,350 for individuals and $6,700 for joint/head of household filers.

Maryland County Piggyback Income Tax — The State’s Most Distinctive Tax Feature

On top of the state PIT, every Maryland county and Baltimore City levies a local “piggyback” income tax on residents based on Maryland taxable income. This is unusual — most US states do not have any local income tax. The 2026 piggyback rates:

Jurisdiction	2026 Local Rate
Baltimore City	3.20%
Montgomery County	3.20%
Prince George’s County	3.20%
Howard County	3.20%
Baltimore County	3.20%
Anne Arundel County	2.81% (graduated)
Frederick County	2.75-3.20% (graduated by income)
Worcester County	2.25% (lowest in the state)
All other counties	~2.40-3.20%

The 2025 budget bill raised the maximum allowable local rate from 3.20% to 3.30% effective for tax years beginning after December 31, 2024 — counties may opt to use the higher cap in future years. Baltimore City layers an additional 0.5% local surtax on income over $1 million.

Combined effective state-plus-county rate at the top runs roughly:

• Baltimore City top filer (over $1M): 6.50% state + 3.20% county + 0.50% surtax = ~10.20%
• Montgomery / PG / Howard / Baltimore County top filer (over $1M): 6.50% + 3.20% = 9.70%
• Worcester County low/middle filer: 4.75% + 2.25% = 7.00%

Because the county tax is mandatory and cannot be avoided by structure, Maryland operates as one of the highest combined state-and-local-income-tax states in the country. Plan for it in your owner draws and S-corp distribution modeling.

Maryland Corporate Income Tax

Maryland’s corporate income tax rate is 8.25% on net taxable income — applies to C-corporations only. Pass-through entities (LLCs taxed as partnerships, S-corps, partnerships) do not pay corporate tax; income flows to owners’ personal returns at the graduated PIT plus county piggyback rates.

Step 4: Get Workers’ Compensation Insurance

Maryland requires workers’ compensation insurance for any employer with one or more employees under Maryland Labor and Employment Article. Sole proprietors with no employees are exempt; family members on payroll generally count as employees. Independent contractors who are properly classified do not require coverage, but Maryland’s Workers’ Compensation Commission and Department of Labor audit misclassification aggressively.

Where to get coverage:

• Private insurer: Any Maryland-licensed workers’ comp carrier
• Chesapeake Employers Insurance Company (CEIWC): The state-operated competitive workers’ comp carrier serving as the insurer of last resort. Chesapeake reduced net rates by 4% effective April 1, 2026, the latest in a multi-year rate-reduction trend reflecting Maryland’s improving claim experience. Apply at ceiwc.com

Penalties for operating without required coverage include fines up to $10,000, stop-work orders, and personal liability for the full medical and indemnity cost of any workplace injury. The Maryland Workers’ Compensation Commission (WCC) at wcc.state.md.us oversees claims and disputes.

Step 5: Comply With Maryland Wage and Hour Laws

Minimum Wage

Maryland’s statewide minimum wage is $15.00 per hour for all employers in 2026 under the Fair Wage Act of 2023, which accelerated the prior phase-in to a single $15 floor effective January 1, 2024. There is no separate state-level rate for small employers. The tipped minimum wage is $3.63 per hour — tips received must bring the employee’s effective hourly compensation to at least $15.00, or the employer must make up the difference.

County add-ons exceed the state floor in three jurisdictions:

• Montgomery County: $15.50 (small employers, ≤10 employees) up to $17.65 (large employers, 51+ employees) effective July 1, 2025 — tied to a county-level annual indexing formula
• Howard County: $15.00 (small employers, ≤14 employees) up to $15.50 (large employers, 15+ employees) effective January 1, 2026
• Prince George’s County: $15.30 (uniform rate, all employer sizes) effective January 1, 2026

Unincorporated and other counties default to the state $15.00. If you operate across multiple Maryland counties (common for cleaning, landscaping, HVAC service), pay each employee the higher applicable rate based on where they perform the work.

Maryland Healthy Working Families Act (Earned Sick and Safe Leave)

Maryland has had a statewide earned sick and safe leave mandate since February 11, 2018 under the Healthy Working Families Act, codified at MD Code, Lab. & Empl. § 3-1301 et seq. Every Maryland employer must provide accrued sick and safe leave:

• Employers with 15+ employees: Must provide paid earned sick and safe leave
• Employers with under 15 employees: Must provide unpaid earned sick and safe leave (still job-protected)
• Accrual rate: 1 hour per 30 hours worked, capped at 40 hours per year
• Use cap: Up to 64 hours of accrued leave can be carried over year-to-year, with annual usage cap of 64 hours
• Eligibility delay: Employees may not use accrued leave during their first 106 calendar days of employment
• Permitted uses: Employee or family member illness/injury, preventive care, parental leave, and absences related to domestic violence, sexual assault, or stalking

“Employee” includes full-time, part-time, temporary, and seasonal workers when counting toward the 15-employee threshold.

FAMLI — Delayed Again to 2027 Contributions / 2028 Benefits

The Maryland Family and Medical Leave Insurance (FAMLI) program was originally scheduled to begin contributions July 1, 2025 and benefits July 1, 2026. House Bill 102 of 2025, signed by Governor Wes Moore on May 6, 2025, delayed the program by 18-24 months:

• Payroll contributions begin January 1, 2027 (revised from July 1, 2025)
• Benefits begin January 2028 (revised from July 1, 2026; specific date to be set by the Department of Labor between January 1, 2027 and January 3, 2028)
• Total contribution rate: 0.9% of covered wages up to the federal Social Security wage base, split evenly between employer and employee (0.45% each) for employers with 15 or more employees
• Small employers (14 or fewer employees) are exempt from the employer share but must still withhold and remit the employee 0.45% share
• Maximum benefit: $1,000 per week, up to 12 weeks per year for qualifying family or medical leave
• Administering agency: Maryland Department of Labor (paidleave.maryland.gov)

If you are forming a Maryland business in 2026, FAMLI is not yet a live payroll obligation — but the program exists in statute and will activate in 2027. Budget for the employer 0.45% in your 2027 hiring projections.

Step 6: Get Local Business Licenses and Trader’s Licenses

Maryland has 23 counties plus Baltimore City (an independent city, not part of any county). Local licensing is administered through the Clerk of the Circuit Court in each county, separately from state and city licensing.

Local Trader’s License (Retail and Many Service Businesses)

Most retail businesses and some service businesses must obtain a Maryland Trader’s License from the Clerk of the Circuit Court in the county where the business is located. The fee is set on a sliding scale based on average inventory or stock-in-trade:

• Inventory ≤ $1,000: $15 (Baltimore City) / $15-30 (other counties)
• Inventory $1,001 – $50,000: scales upward
• Inventory > $750,000: $800 (highest tier statewide, plus $5 issuance fee in Baltimore City)

Trader’s licenses are due May 1 each year. Cleaning, landscaping, food trucks, and most pure-service businesses without significant inventory typically pay the lowest tier.

Major Jurisdiction-Specific Requirements

• Baltimore City: Combined Trader’s License + Minor Privileges License through Department of Finance and the Clerk of the Circuit Court for Baltimore City. Mobile food vendors require a separate Baltimore City Health Department Mobile Food Service Facility license
• Montgomery County: Trader’s License through Clerk of the Circuit Court for Montgomery County in Rockville; Montgomery County Department of Health and Human Services (DHHS) separately licenses food, child care, and other regulated industries
• Prince George’s County: Trader’s License through Clerk in Upper Marlboro; PG County Department of Health handles food and child care permits
• Anne Arundel County (Annapolis, BWI, Fort Meade): Trader’s License through Clerk in Annapolis. Annapolis municipal business license is separate
• Frederick County: Trader’s License through Clerk in Frederick. City of Frederick has separate municipal requirements
• Howard County (Columbia): Trader’s License through Clerk in Ellicott City
• Worcester County (Ocean City): Trader’s License through Clerk in Snow Hill. Ocean City requires separate municipal licensing for boardwalk/beachfront vending and short-term rentals

State Industry Licenses Through DLLR

The Maryland Department of Labor (DLLR) houses the Division of Occupational and Professional Licensing, which administers most state-level industry boards. Key boards relevant to common small-business industries:

• Maryland Board of HVACR Contractors — Master, Master Restricted, Limited Contractor, Journeyman, Restricted Journeyman licensing under Bus. Reg. § 9A-101 et seq.
• Maryland Board of Cosmetologists — Cosmetologist, esthetician, nail technician, and salon licensing under Bus. Occ. & Prof. § 5-101 et seq.
• Maryland Board of Master Electricians and county-level electrician licensing
• Maryland State Board of Plumbing — Master, Journey, Apprentice plumber under Bus. Occ. & Prof. § 12-101 et seq.

Industries licensed outside DLLR include private detective agencies (Maryland State Police Licensing Division), child care (MSDE Office of Child Care), and food service (24 local health departments — 23 counties + Baltimore City — under MDH oversight).

Maryland’s Distinctive Tax and Regulatory Environment

Five elements of Maryland’s environment require specific planning compared to most other states:

1. The county piggyback income tax is mandatory and cannot be avoided by entity structure. Whether you operate as an S-corp, sole prop, partnership, or single-member LLC, the income flows to your personal return at state PIT plus county piggyback. A Montgomery County or Baltimore City owner taking $200,000 in pass-through income pays roughly 8.95-9.45% combined state and local PIT — meaningful when comparing Maryland against neighboring Virginia (5.75% top, no local) or Pennsylvania (3.07% flat, plus modest local 1-3.9%). For multi-state owners, residency planning matters.

2. The annual $300 SDAT fee is real money for early-stage businesses. Maryland is one of only a handful of states charging an annual entity filing fee at this level. The MarylandSaves auto-IRA waiver is the cleanest fix — set up payroll deductions even if your first hire is far off, and the $300 fee disappears for as long as you participate.

3. FAMLI is delayed but coming. Maryland businesses that hired in 2024-2025 with a “0.45% employer FAMLI line item” in their 2026 budget should remove it — payroll contributions do not start until January 1, 2027. Businesses making 2027 hiring plans must add the line back in.

4. Three counties impose minimum wages above the state $15.00. Montgomery County (up to $17.65), Howard County (up to $15.50), and Prince George’s County ($15.30) each require higher pay than the state floor. Multi-county service businesses (cleaning crews, HVAC techs, landscaping crews) must pay the rate of the county where work is performed, not the rate of the home office.

5. Maryland is an all-party (two-party) consent state under Cts. & Jud. Proc. § 10-402. Recording a phone call without permission of all parties is a felony punishable by up to 5 years and a $10,000 fine. This applies to customer service calls, sales calls, and dispatch radio. If you operate in adjacent one-party states (Virginia, Delaware, DC for in-person), the cross-border rules trip up dispatchers and call centers.

Maryland Market Context: Where the Demand Is

Maryland’s economic geography splits into roughly four zones, each with different small-business demand drivers:

• DC Metro (Montgomery County, Prince George’s County, Frederick County): Approximately 2.5 million residents, federal workforce concentrated at NIH, FDA, NSA (Fort Meade), and HHS. Montgomery County is the wealthiest US county by median household income, driving high-end demand for residential services (cleaning, landscaping, HVAC), private daycare, and specialty food trucks. Federal contractor concentration in PG County (NASA Goddard, NOAA) creates separate B2B service opportunities
• Baltimore Metro (Baltimore City, Baltimore County, Anne Arundel, Howard, Harford): Approximately 2.8 million residents. Anchored by Johns Hopkins (largest private employer), Port of Baltimore, Under Armour HQ, Northrop Grumman, and the BWI Airport corridor. Naval Academy and Fort Meade (NSA + DISA + Cyber Command) drive Anne Arundel demand. Aberdeen Proving Ground anchors Harford County. Baltimore City’s independent-city status means city-only service businesses face Baltimore Health Department and Department of Finance requirements separate from any surrounding county
• Eastern Shore (Wicomico, Worcester, Talbot, Dorchester, Caroline, Queen Anne’s, Kent, Cecil): Tourism economy in Ocean City (Worcester) and St. Michaels (Talbot); poultry industry concentration around Salisbury (Wicomico) anchored by Perdue Foods; agricultural service demand throughout. Seasonal cash flow pattern — May through Labor Day spikes for tourism-adjacent services, with food trucks and cleaning services in particular driven by Ocean City’s summer rental market
• Western Maryland (Washington, Allegany, Garrett): Hagerstown logistics corridor (FedEx, Volvo, several distribution centers) drives industrial and commercial cleaning demand. Garrett County’s Deep Creek Lake is a vacation-home market driving second-home property services. Lower cost basis than DC/Baltimore metros makes this region attractive for small business launch but with thinner customer density

Annapolis (Anne Arundel County, state capital) layers government-related demand on top of the Baltimore metro. Frederick (Frederick County) has been one of Maryland’s fastest-growing markets, drawing both DC commuters and Baltimore commuters with substantially lower housing costs than either metro core.

Maryland Business Guides by Industry

Every industry has different licensing, permit, and insurance requirements in Maryland. Select your business type:

• How to Start a Cleaning Service in Maryland — commercial cleaning IS sales-taxed (6%) but residential cleaning is exempt; workers’ comp at 1 employee; multi-county minimum wage compliance
• How to Start a Food Truck in Maryland — 24 local health departments (23 counties + Baltimore City); commissary requirement; Ocean City and Annapolis tourist-event vending; Baltimore City Mobile Food Service Facility permit
• How to Start a Daycare in Maryland — MSDE Office of Child Care under COMAR 13A.16/17/18; ratios 1:3/1:6/1:10/1:15; Maryland EXCELS quality-rating; CCS subsidy
• How to Start an HVAC Business in Maryland — DLLR Maryland Board of HVACR Contractors; 5-tier license structure; PSI exam centers in Baltimore, College Park, Hagerstown, Lanham, Salisbury
• How to Start a Hair Salon in Maryland — DLLR Board of Cosmetologists; 1,500 hours OR 24-month apprenticeship; separate Salon License; 6 hours CE plus one-time domestic violence awareness training
• How to Start a Landscaping Business in Maryland — MDA Pesticide Regulation Section ($75 + $25/category); Miss Utility (MD 811) 2 business days; no state landscape license
• How to Start a Private Investigation Business in Maryland — Maryland State Police Licensing Division Private Detective Agency license; ALL-PARTY consent recording (Cts. & Jud. Proc. § 10-402, felony exposure)

Key Maryland Business Resources

Resource	What It Covers
Maryland Business Express	SDAT — LLC/corp formation, trade names, annual reports
Comptroller of Maryland	State PIT, corporate income tax, sales and use tax (6%), withholding
Maryland Department of Labor (DLLR)	Unemployment Insurance, wage and hour, FAMLI, sick leave, occupational licensing boards
Maryland FAMLI	Family and Medical Leave Insurance — contributions begin 1/1/2027, benefits 1/2028
Maryland Workers’ Compensation Commission	Workers’ comp claims, employer compliance
Chesapeake Employers Insurance (CEIWC)	State-operated workers’ comp insurer of last resort
MarylandSaves	Auto-IRA program — participation auto-waives the $300 SDAT annual fee
Maryland Underground Facilities Damage Prevention Authority	Miss Utility (MD 811) — 2 business days dig notice
Maryland New Hire Reporting	Report new and rehired employees within 20 days
Maryland Department of Commerce	Economic development, tax credits, county business resources

Frequently Asked Questions

How much does it cost to start an LLC in Maryland?

The Articles of Organization filing fee through Maryland Business Express (SDAT) is $100 standard or $150 expedited. After formation, every Maryland LLC must file an Annual Report and Personal Property Return by April 15 each year for $300 — among the highest annual entity fees in the country. The $300 fee is automatically waived if your business participates in MarylandSaves, the state’s auto-IRA retirement program. Optional costs: trade name (DBA) registration at $25 (renewable every 5 years), and resident agent service if you use a third-party provider.

What is FAMLI and does it apply to my Maryland business?

FAMLI (Family and Medical Leave Insurance) is Maryland’s state-administered paid family and medical leave program. Under HB 102 of 2025, signed by Governor Wes Moore on May 6, 2025, the program was delayed by 18-24 months: payroll contributions begin January 1, 2027 (originally July 1, 2025) and benefits begin January 2028. The total contribution rate is 0.9% of covered wages up to the federal Social Security wage base, split evenly between employer and employee (0.45% each). Employers with 14 or fewer employees are exempt from the employer share but still withhold the employee share. Maximum benefit will be $1,000 per week for up to 12 weeks. FAMLI is not currently a live payroll obligation — it activates in 2027.

Does Maryland require workers’ compensation for part-time employees?

Yes. Maryland’s workers’ compensation requirement under MD Code, Lab. & Empl. § 9-101 et seq. applies to any employer with one or more employees, full-time or part-time. Family members on payroll generally count. Sole proprietors with no employees are exempt. Purchase from any Maryland-licensed private insurer or from Chesapeake Employers Insurance Company (CEIWC), the state-operated insurer of last resort that must accept any Maryland employer who applies. Chesapeake reduced net rates by 4% effective April 1, 2026.

Does Maryland have a general business license?

Maryland does not require a single statewide general business license. However, retail businesses and many service businesses need a local Trader’s License from the Clerk of the Circuit Court in the county (or Baltimore City) where they operate, with fees scaled to inventory. Sales tax license through the Comptroller (free) is required for any business selling taxable goods or services. Industry-specific state licenses apply for HVACR contractors, cosmetologists, plumbers, electricians, child care providers, food service, and private detective agencies.

What is Maryland’s combined state and local income tax rate?

Maryland uses a graduated state PIT from 2% to 6.5% (with two new top brackets at 6.25% and 6.5% added for 2026), plus a county piggyback income tax from approximately 2.25% to 3.20%. Combined effective rates run from roughly 4.25% (Worcester County low-income filer) to 9.45-10.20% (Baltimore City top-bracket filer including the city’s $1M+ surtax). Most of the populous counties — Montgomery, Prince George’s, Howard, Baltimore County, Baltimore City — are at the 3.20% county maximum. The 2025 budget bill raised the maximum allowable county rate to 3.30% for tax years after December 31, 2024. Maryland is one of the highest combined state-and-local income tax states in the country.

Why is Maryland’s sales tax simpler than most states?

Maryland’s 6% state sales tax has no local sales tax add-on — Maryland counties and Baltimore City do not impose local sales tax on top of the state rate. This is meaningfully simpler than Virginia, Pennsylvania, or most other states with multi-jurisdiction sales tax administration. Maryland does have a separate 9% rate on alcoholic beverages and a 3% reduced rate on B2B sales of computing infrastructure, data processing, and web hosting (effective July 1, 2025 under HB 1515 of 2024). Cleaning and janitorial services for commercial or industrial buildings are sales-taxable; residential cleaning is exempt.

Is Maryland a one-party or all-party consent recording state?

Maryland is an all-party (two-party) consent state under MD Code, Cts. & Jud. Proc. § 10-402. Recording a wire, oral, or electronic communication without the consent of all parties is a felony punishable by up to 5 years imprisonment and a $10,000 fine. This applies to phone calls, in-person conversations, and electronic communications. The rule is critical for any service business that takes customer calls, sales calls, or dispatch communications — and especially critical for private investigators, where surveillance recording rules diverge sharply from one-party-consent neighbors like Virginia and DC.