To pay sales tax in Maryland, you file Form 202 through the Maryland Tax Connect portal (or by mail) and remit what you collected by the 20th of the month after your reporting period ends. Most sales are taxed at 6%, but alcohol, cannabis, vehicle rentals, tobacco pipes, and vaping products carry higher rates that go on separate lines. File on time and you keep a small discount off the tax owed; file late and you owe a 10% penalty plus interest.
What to Gather Before You File
Three sets of numbers do most of the work on your return. Your total gross sales for the period, meaning everything you rang up regardless of taxability. Your exempt and resale sales, broken out so they can be subtracted to reach net taxable sales. And any use tax you owe on items your business bought without paying Maryland sales tax, such as supplies from an out-of-state vendor that didn’t collect it.
You also need your eight-digit Central Registration Number, the identifier that ties every return and payment to your business.1Comptroller of Maryland. bFile Help System Have the start and end dates of the reporting period on hand, plus any credits you’re claiming for tax already paid on items purchased for resale. If your sales cross multiple rate categories, sort them by rate before you open the portal rather than allocating them on the fly.
The Rates You’ll Report
Most taxable goods and services are subject to the standard 6%, but Form 202 breaks out several higher-rate categories on separate lines:2Comptroller of Maryland. Maryland Form 202 Sales and Use Tax Return Instructions
- 6% on most tangible personal property, digital products, and digital codes
- 8% on short-term truck rentals and peer-to-peer car sharing
- 9% on alcoholic beverages and cannabis products
- 11.5% on short-term car and motorcycle rentals, including peer-to-peer car sharing for cars
- 12% on tobacco pipes
- 20% on electronic smoking devices and vaping liquid generally
- 60% on vaping liquid sold in containers of 5 milliliters or less
Use tax on your own business purchases goes on a separate block of lines (20 through 31 on the current form) using the same rate breakdowns. Applying the wrong rate is one of the easier ways to trigger a notice, so businesses selling in mixed categories should let their point-of-sale system sort transactions by rate rather than doing it manually at filing time.
Filing and Paying Through Maryland Tax Connect
Since February 2024, sales and use tax returns run through the Maryland Tax Connect portal, which replaced the older bFile system.3Comptroller of Maryland. Maryland Tax Connect Home Create a Maryland Tax Connect account and link your sales and use tax account using your Central Registration Number. Registration includes security questions, a 14-character password, and a one-time email passcode each time you log in.4Comptroller of Maryland. Maryland Tax Connect Registration and Linking Tax Accounts Guide
Once you’re in, select your sales and use tax account and enter your figures for the period. The portal calculates the tax due, applies your timely filing discount if you qualify, and lets you submit payment electronically in the same session. When submission is successful, the system generates a confirmation number. Save it.
Paying by Mail
If you’re filing on paper, send the completed Form 202 with a check or money order payable to the Comptroller of Maryland to:
Revenue Administration Division
P.O. Box 8888
Annapolis, MD 21401-88885Comptroller of Maryland. Our Locations
Write your Central Registration Number on the check so the payment posts to the right account. Keep copies of what you send, and consider certified mail for proof of a timely postmark.
When Your Return Is Due
The Comptroller assigns your filing frequency based on how much sales tax you collect each year. Businesses collecting $15,000 or more per year file monthly. Those collecting less generally file quarterly. Seasonal businesses may be put on a seasonal schedule. The deadline is the same in every case: the 20th of the month following the end of your reporting period, shifting to the next business day when the 20th lands on a weekend or state holiday.6Comptroller of Maryland. Business Tax Tip #22 – Maryland Sales and Use Tax Frequently Asked Questions
Monthly filers owe January’s return by February 20, February’s by March 20, and so on. Quarterly filers owe the first quarter by April 20, the second by July 20, the third by October 20, and the fourth by January 20 of the following year.
File a return even when you had zero taxable sales for the period. Skipping a zero-dollar return can trigger a delinquency notice and eventually put your license at risk.
The Timely Filing Discount
File and pay on time and Maryland lets you keep a small credit against the tax owed. Under Tax-General ยง 11-105, the discount is 1.2% on the first $6,000 of sales tax due with each return and 0.9% on any amount above $6,000, capped at $500 per return.7Maryland General Assembly. Maryland Code Tax-General 11-105 For consolidated returns, the $500 cap applies to the consolidated total. The discount does not apply to use tax on your own business purchases.
The math is straightforward. On a return showing $10,000 in sales tax due, the discount is 1.2% of $6,000 ($72) plus 0.9% of $4,000 ($36), for a $108 credit. If your return or payment is even one day late, the discount disappears for that period.
What Late Filing Costs
Missing a deadline costs more than the discount. The Comptroller adds a penalty of 10% on the unpaid tax, plus interest accruing from the original due date.6Comptroller of Maryland. Business Tax Tip #22 – Maryland Sales and Use Tax Frequently Asked Questions Both apply regardless of why the payment was late, and they stack for every period you miss.
If you have a legitimate reason, you can ask the Comptroller to waive the penalty. Maryland law allows a tax collector to waive penalties for reasonable cause.8Maryland General Assembly. Maryland Code Tax-General 13-714 – Waiver of Penalty The statute doesn’t define “reasonable cause,” so outcomes vary. A natural disaster, serious medical emergency, or documented systems failure tends to fare better than a general explanation. Interest is generally not waivable even when the penalty is.
Repeated delinquencies escalate beyond dollars. The Comptroller can revoke your sales and use tax license, and collecting sales tax without a valid license is a separate violation. If a large balance is piling up, contacting the Comptroller’s office about a payment arrangement before enforcement begins usually goes better than staying quiet.
Records to Keep After You Pay
Maryland requires you to keep complete records of sales, purchases, and the tax you collected and paid for at least four years.9Comptroller of Maryland. Business Tax Tip #2 Sales and Use Tax Records Complete records means invoices, receipts, resale and exemption certificates, purchase orders, and bank statements that tie back to your reported figures. An auditor can request access during normal business hours anywhere in that four-year window.
The four-year period lines up with the standard audit lookback. If the Comptroller suspects substantial underreporting or fraud, that lookback can extend further. Digital records are fine as long as they’re legible, complete, and accessible; if your point-of-sale system purges old data automatically, change the setting so transaction-level detail survives the full four years.