The Maryland corporation income tax applies to every Maryland corporation and every other corporation that has a nexus with Maryland. Nexus indicates a taxable connection between a corporation and a taxing authority. If a corporation conducts business activity within Maryland and exceeds the provisions of U.S.C.A. Title15, Section 381 of the Interstate Commerce Tax Act (P.L. 86-272), it has a nexus and must file a corporation income tax return, using Form 500. The following list includes some in-state activities which generally create nexus and are outside the protection of U.S.C.A. Title 15 Section 381 (P.L. 86-272):
- Maintaining a business location in Maryland, including any kind of office.
- Ownership or use of property in Maryland, real or personal, whether the property is rented office space or equipment used in the manufacture and distribution of goods.
- Employees soliciting and accepting orders in Maryland.
- Installation or assembly of the corporation's product.
- Maintaining a stock of inventory in a public warehouse or placement of the corporation's inventory in the hands of a distributor or other non-employee representative.
- Sales persons making collections on regular or delinquent accounts.
- Technical assistance and training with Maryland offered by corporate personnel to purchasers or users of corporate products after the sale.
- Corporate personnel repairing or replacing faulty or damaged goods.
- Mobile stores in Maryland (such as trucks with driver-salesmen) from which direct sales are made.
For more information, see Administrative Release No. 2, Interstate Commerce Tax Act - Domestic and Foreign Corporations - Nexus Requirements - Apportionment of Corporate Net Income
For situations involving the Maryland sales and use tax, see Nexus Information for Sales and Use Tax.