Businesses operating in Maryland are subject to various state taxes. Understanding these taxes and the procedures for filing and paying them is essential for compliance and financial planning. This guide provides an overview of the types of taxes businesses in Maryland must pay, how to file these taxes, payment methods, exemptions, and due dates. Businesses in Maryland are required to pay several types of taxes, including:
Maryland Corporate Income Tax
The Corporate Income Tax in Maryland is levied on the net income of corporations doing business within the state. The current rate is 8.25%. To file this tax, corporations must use Form 500, the Maryland Corporation Income Tax Return. This form can be filed electronically through Maryland’s bFile system or by mail.
When it comes to paying Corporate Income Tax, businesses can choose from several methods. Online payments can be made via the Comptroller of Maryland’s bFile system using electronic funds transfer (EFT) or a credit card. Payments can also be made in person at the Comptroller of Maryland’s offices, or by mailing a check or money order along with the tax return form.
Exemptions and credits can significantly reduce the tax burden for corporations. Maryland offers various corporate income tax credits such as the Job Creation Tax Credit, Research and Development Tax Credit, and Enterprise Zone Tax Credit. Adhering to due dates is crucial; corporate income tax returns are typically due by the 15th day of the fourth month after the end of the corporation’s tax year, usually April 15 for calendar-year taxpayers.
Maryland Sales and Use Tax
Maryland imposes a 6% Sales and Use Tax on the sale of tangible personal property and certain services. To file this tax, businesses use Form 202, which can be submitted online via the Comptroller of Maryland’s bFile system or mailed to the appropriate address.
Payments for the Sales and Use Tax can be made online through the bFile system using EFT or credit cards. Businesses also have the option to make payments in person at designated offices or by mailing a check or money order with the completed Form 202.
Several exemptions exist for the Sales and Use Tax in Maryland. For example, prescription medicines, some agricultural products, and sales to nonprofit organizations are exempt from this tax. Monthly sales tax returns are due by the 20th of the following month, and quarterly returns are due by the 20th of the month following the end of the quarter.
Maryland Personal Property Tax
The Personal Property Tax is levied on the value of business-owned personal property such as equipment and inventory. To file this tax, businesses must use Form 1, which can be submitted electronically or by mail to the Maryland Department of Assessments and Taxation.
Businesses can pay the Personal Property Tax online via the Maryland Business Express website, in person at the Department of Assessments and Taxation offices, or by mailing a check or money order.
Exemptions may apply to certain types of personal property, such as manufacturing equipment and machinery, which can be exempt from personal property tax. The due date for filing personal property tax returns is April 15 each year.
Maryland Withholding Tax
Employers in Maryland are required to withhold state income tax from their employees’ wages and remit it to the state. To file this tax, employers use Form MW506, which can be filed electronically through the bFile system or by mail.
Payments for the Withholding Tax can be made online using EFT or credit cards through the bFile system. Additionally, employers can make payments in person at the Comptroller of Maryland’s offices or by mailing a check or money order with Form MW506.
There are no specific exemptions for the Withholding Tax, but it is crucial for employers to withhold the correct amount of tax from employee wages. The due dates for withholding tax returns can be monthly or quarterly, depending on the amount withheld. Monthly returns are due by the 15th of the following month, while quarterly returns are due by the 15th of the month following the end of the quarter.
Maryland Franchise Tax
Franchise Tax in Maryland is specific to certain types of businesses and is imposed based on the value of a company’s assets or income. The filing requirements and forms for Franchise Tax vary, and businesses should consult the Maryland Comptroller’s website for specific instructions.
Payments for Franchise Tax can be made online through the Comptroller of Maryland’s bFile system, in person at designated offices, or by mailing a check or money order.
Exemptions for Franchise Tax depend on the type of business and specific tax requirements. It is essential for businesses to check the Maryland Comptroller’s guidelines for any applicable exemptions. Due dates for Franchise Tax payments also vary, so businesses must ensure they are aware of their specific deadlines to avoid penalties.