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Frequently Asked Questions About the Sales and Use Tax

1 - What is included in the taxable price?

The tax is imposed on the entire price whether paid in the form of money, promises, barter or anything else of value. It includes the amount of liabilities assumed by the buyer, the value of services performed for the vendor and, except for federal food stamps, the face value of any coupon for which the vendor can get reimbursement from another source. The taxable price is not reduced for any expense or cost for labor or service rendered, material used or any property sold except as explained below.

The taxable price may be reduced by separately-stated charges for installation, professional services, interest payments and delivery services. Additionally, the tax does not apply to consumer excise taxes, deposits, cash discounts and mandatory gratuity charges on food and beverage sales for groups of ten or fewer. Reductions to the taxable price must be made known to the buyer by documentary evidence in existence at the time of the sale. However, if these charges are included in a lump-sum price with no separate statement, the tax must be collected on the entire amount of the sale.

Links for Sales and Use Tax FAQs
Taxpayer Assistance
Frequently Asked Questions
Business Tax FAQs
Sales and Use Tax
Sales and Use Tax FAQs
  1 - What is included in the taxable price?
  2 - How is the tax applied to sales of cigarettes?
  3 - Are there any limitations on the interest deduction?
  4 - Are store coupons included in the taxable price?
  5 - Are warranty charges taxable?
  6 - Are shipping and handling charges subject to the sales tax?
  7 - Are all labor charges exempt?
  8 - What is the difference between repair and fabrication labor?
  9 - I am an out-of-state vendor who makes sales in Maryland. Do I need to register to collect the sales and use tax?
  10 - My nonprofit 501(c)(3) organization does not have a location in Maryland, but we will be attending a conference in your state. Do we qualify for a sales tax exemption on our purchases of food, beverages, and accommodations during our stay?
  11 - Does the sales and use tax apply to rentals of tangible personal property?
  12 - How can I obtain a resale certificate?
  13 - I am a government contractor. Am I entitled to an exemption on my purchases of materials and supplies?
  14 - How can I obtain a tax ID number to give to vendors when I make a purchase for resale?
  15 - Has the Maryland General Assembly provided for tax free shopping periods?
  17 - I am a manufacturer of the products I sell. How do I claim exemption on items purchased for use in production activities?
  16 - How can I determine if a church or other nonprofit organization qualifies for exemption on its purchases?
  18 - Can I make "tax-included" sales?
  19 - How do I change the name of my business for my tax records?
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