Maryland’s vape tax is a sales and use tax under Tax-General Article § 11-104(j), charged at 20% of the retail price on electronic smoking devices and 60% on vaping liquid sold in containers of 5 milliliters or less. Both rates are scheduled to rise on July 1, 2026. The Comptroller of Maryland collects the tax, and returns are filed monthly through the Maryland Tax Connect portal.
Current Rates Through June 30, 2026
Two rates apply, and the one you charge depends on what’s in the package.
- 20% on electronic smoking devices. This covers the hardware itself: vape pens, e-cigarettes, electronic cigars, electronic hookahs, and any component, part, or accessory sold with or separately from the device. Vaping liquid packaged in containers larger than 5 milliliters also sits in this bucket.
- 60% on vaping liquid in small containers. Any vaping liquid in a container of 5 milliliters or less is taxed at 60% of the retail price. Disposable pods and small pre-filled cartridges fall here.
The 20% device rate took effect July 1, 2024, when Senate Bill 362 raised it from the original 12%.1Comptroller of Maryland. Tax Alert – Cigarettes, Other Tobacco Products, and Electronic Smoking Devices Tax Rate Changes The 60% rate on small-container liquid has been in place since the original 2020 law.
What Counts as a Taxable Product
Maryland defines an electronic smoking device as any noncombustible device that delivers aerosolized or vaporized nicotine to someone inhaling from it. That includes e-cigarettes, vape pens, electronic cigars, electronic cigarillos, electronic pipes, and electronic hookahs.2Maryland General Assembly. Fiscal and Policy Note for House Bill 1576 The definition also sweeps in any component, part, or accessory, whether sold with the device or on its own. Replacement coils, batteries, tanks, and mouthpieces are all taxable at the device rate.
Vaping liquid is any solution designed to be aerosolized or vaporized during use of an electronic smoking device. Container size is the trigger for the higher rate. Liquid in a container of 5 milliliters or less is taxed at 60%. Anything in a container larger than 5 milliliters is taxed at the 20% device rate instead.
Rates Rising July 1, 2026
House Bill 1576, passed during the 2026 legislative session, raises both rates substantially starting July 1, 2026:3Maryland General Assembly. House Bill 1576 – Enrolled
- Electronic smoking devices go from 20% to 30% of the retail price.
- Vaping liquid in containers of 5 milliliters or less goes from 60% to 90% of the retail price.
The revenue from the increase is directed to two dedicated funds. On devices, the portion attributable to the first 8% of the new rate goes to the Blueprint for Maryland’s Future Fund, and the next 10% goes to the Maryland Pediatric Cancer Fund. On small-container vaping liquid, the revenue from the additional 30 percentage points goes entirely to the Pediatric Cancer Fund.2Maryland General Assembly. Fiscal and Policy Note for House Bill 1576
If you’ll be holding inventory on July 1, watch for Comptroller guidance on floor tax obligations covering stock purchased at the old rate. When the 2024 change took effect, the Comptroller required floor tax returns on cigarettes and other tobacco products, so a similar requirement could apply to electronic smoking devices in 2026.
How to File and Pay
Since December 2024, electronic smoking device tax returns must be filed online through the Maryland Tax Connect portal.4Comptroller of Maryland. Tobacco Tax Filing Added to Maryland Tax Connect Portal The portal accepts electronic check and credit card payments, and paper filing is no longer the standard method.
To file, you need your Comptroller identification number and a breakdown of gross retail sales separated by product category. Track device sales and small-container liquid sales in separate ledgers so you can apply the correct rate to each. The return covers one calendar month: report the total retail price for each category, then multiply by the applicable rate.
Returns are due monthly. Confirm the exact due date on the portal, since it can shift when the standard deadline falls on a weekend or holiday. Keep point-of-sale records reconciled with your return figures, because the Comptroller’s auditors will compare the two if they inspect your books.
Penalties and Interest for Late Payment
Miss a filing deadline or underpay, and Maryland applies both a penalty and interest. The late-payment penalty can reach 25% of the tax owed. Interest accrues from the date the return was originally due; the annual rate was 11.4825% in 2025, and the 2026 rate should be comparable.5Comptroller of Maryland. Tax Guidance – Penalty and Interest Charges
Willful violations carry heavier consequences. Under Maryland Tax-General § 13-1015, knowingly shipping, importing, selling, or transporting electronic smoking devices in Maryland without paying the required tax is a felony. A first violation carries a mandatory fine for each package involved, and any violation can bring up to two years of imprisonment.6Maryland General Assembly. Maryland Code Tax-General 13-1015 – Penalties These criminal provisions target deliberate evasion rather than honest filing mistakes, but they’re the reason staying current on returns matters.
Records You Need to Keep
Maryland requires you to keep all records related to sales and purchases for at least four years. A Comptroller auditor can request to inspect those records at any time during business hours.7Comptroller of Maryland. Business Tax Tip 2 – What Sales Records Do I Need to Keep
In practical terms, your point-of-sale system should log each transaction with enough detail to show the product category, container size for liquid sales, retail price, and tax collected. A spreadsheet edited by hand will not hold up well in an audit. If you store records electronically, federal guidance from the IRS calls for accurate, legible reproductions of every transaction, a clear audit trail from the general ledger back to each source document, and controls that prevent unauthorized changes to stored data.8Internal Revenue Service. Revenue Procedure 97-22
Do You Need a Separate ESD License?
Retailers selling electronic smoking devices do not need a separate ESD license from the Comptroller. A standard Maryland sales and use tax registration covers retail sales. The dedicated license applies to manufacturers, wholesalers, distributors, and importers who don’t already hold a cigarette or other tobacco products license.9Comptroller of Maryland. Electronic Smoking Devices License Application
- Manufacturers: $25 per year
- Wholesalers and importers: $150 per year
The application (Form 723) takes a few minutes to complete. If your business is located in Maryland, the Comptroller will schedule a premises inspection before issuing the license, typically within two to three weeks. The full review process runs 10 to 30 business days after submission, and you need to show evidence of compliance with Maryland’s workers’ compensation laws.
If you mix your own e-liquids in-house, the Comptroller treats you as a manufacturer. The Field Enforcement Division conducts license checks to verify compliance.10Comptroller of Maryland. Bulletin TT-76 – Electronic Smoking Devices
If You Ship Across State Lines
The Maryland vape tax covers sales inside the state. If you also sell online or ship vape products across state lines, the federal Prevent All Cigarette Trafficking (PACT) Act adds a separate layer of compliance that sits on top of your Maryland obligations. Under 15 U.S.C. § 376, anyone selling, transferring, or shipping electronic nicotine delivery systems in interstate commerce must:11Bureau of Alcohol, Tobacco, Firearms and Explosives. Prevent All Cigarette Trafficking (PACT) Act
- Register with the ATF by completing Form 5070.1.
- Register with state and local tax authorities in every jurisdiction where shipments are delivered.
- File monthly reports with the tobacco tax administrator of every state shipped to during the previous month.
- Comply with all state and local licensing and tax laws in every jurisdiction where they operate.
Monthly PACT Act reports are due by the 10th of each month, covering the previous month’s shipments, and must include customer names and addresses, brand names and quantities, and the names and contact information of delivery personnel.12Bureau of Alcohol, Tobacco, Firearms and Explosives. Tobacco Sellers – Reporting, Shipping and Tax Compliance Requirements You cannot ship e-cigarettes, vapes, or vaping liquid through the U.S. Postal Service; USPS shipment of these products is prohibited under the PACT Act.13Bureau of Alcohol, Tobacco, Firearms and Explosives. Vapes and E-Cigarettes Private carriers set their own policies, and many have restricted or banned vape shipments.
Civil penalties for PACT Act violations by a delivery seller run up to $5,000 for a first offense and $10,000 for subsequent violations, or 2% of gross tobacco sales over the preceding year, whichever is greater. Knowing violations can bring up to three years in federal prison.14Office of the Law Revision Counsel. 15 USC 377 – Penalties