Maryland is a state on the East Coast of the United States and one of the Mid-Atlantic states. It borders Pennsylvania to the north, Delaware and the Atlantic Ocean to the east, West Virginia to the west and Virginia to the south. That puts it on the Atlantic coast in the northeastern United States. More than six million people live on its 32,000 km², making the Old Line State one of the most densely populated in the country. The capital is Annapolis, but the largest and best-known city is Baltimore.
If you want success built on honest work and the right environment, Maryland opens its doors. Companies that set up here are in an excellent position to thrive. The Baltimore-Washington region is the fourth-largest market in the nation.
Next door to Washington D.C.
With Washington D.C. as a neighbor, Maryland businesses have an edge in federal funding and research. Maryland ranks first among the states for R&D facilities. It is home to more than 60 federal agencies and 74 federal labs, twice as many as any other state.
Maryland also benefits from federal government contracts and well-paid jobs. Business people in Maryland have direct access to key government decision-makers, foreign embassies and international business leaders.
By the way, here are the 10 most popular US states for foreign direct investment.
The heart of the East Coast
It is not only the proximity to Washington D.C. that works in Maryland's favor, but also its access to the Atlantic. The East Coast is the country's most important trade corridor and one of the most dynamic in the world, and the Old Line State sits at its heart. Companies based in Maryland can reach a third of the US population overnight.
Fitting its location, the state has excellent infrastructure. The Port of Baltimore is the country's leading roll-on/roll-off port. It is served by two Class I freight railroads and offers direct access to I-95 and I-70, the main arteries heading north, south and west.
Getting there by air is just as easy. Besides Maryland's own BWI Thurgood Marshall Airport, three more major airports in neighboring Philadelphia, Northern Virginia and Washington, D.C. are just a short drive away.
A first-class talent pool
Businesses across the state rely on Maryland's outstanding schools to produce an excellent workforce. 40 percent of Old Line State residents hold a bachelor's degree or higher, fourth in the nation. Almost 20 percent hold a graduate or professional degree, which puts Maryland second in the nation.
The state's public K-12 school system consistently outperforms those of other states. Maryland's 57 accredited two- and four-year colleges and universities include world-leading institutions such as Johns Hopkins University and the University of Maryland.
On top of that, Maryland's 16 community colleges offer continuing education courses and certificates as well as customized workforce training. Maryland companies benefit from strategic partnerships between business and academia, giving them access to resources that speed up innovation in key industries.
Income tax in Maryland
Maryland levies an income tax of 2 to 6.5%, depending on income (the top rate applies from tax year 2025 to income above $1 million). On top of that, federal income tax is due.
Corporate tax in Maryland
Maryland levies a corporate tax of 8.25%. On top of that, federal corporate tax is due.
Sales tax in Maryland
The USA has no VAT on the European model. Instead, states, counties and municipalities levy a local sales tax on the sale of goods (but not services).
Sales tax rate in Maryland
Maryland's sales tax is 6% at state level. Cities and counties do not levy sales tax.
Maryland nexus laws & sales tax
Learn more about economic nexus laws and sales tax.
Effective date
October 1, 2018
Included transactions:
Gross revenue from sales of tangible personal property or taxable services delivered into the state
Treatment of exempt sales:
Exempt sales are included; exempt services, however, are not included in the threshold
Trigger:
Sales or transactions
Sales/transaction threshold:
$100,000 or 200 transactions
Evaluation period:
The threshold applies to sales in the current or previous calendar year
Additional information:
- Registration requirements: Maryland has not specified how quickly a remote business must register once it crosses the economic nexus threshold.
- Regulation of out-of-state vendors
- HB1301
Maryland marketplace sellers & sales tax
Learn more about registration requirements for marketplace sellers
Effective date for marketplace facilitators:
October 1, 2019
Economic nexus threshold:
More than $100,000 in gross revenue or at least 200 separate sales of tangible personal property or taxable services in Maryland in the current or previous calendar year. When calculating the threshold:
- Remote sellers should include all sales, direct and facilitated
- Marketplace facilitators should also include all sales into the state
Registration requirements:
- Remote multichannel sellers: Once you cross the economic nexus threshold, you must register with the Comptroller of Maryland and collect Maryland sales tax on sales not taxed by a marketplace facilitator.
- Remote marketplace sellers: You do not need to register with the Comptroller of Maryland if you only sell through one or two marketplace facilitators. Contact the Comptroller for more information.
- In-state multichannel sellers: You must register with the Comptroller and collect tax on sales not taxed by a marketplace facilitator.
- In-state marketplace sellers: You may need to register. Contact the Comptroller for more information.
- Learn more in Tax Alert 09-19 and here.
You will find every state profile in the overview of US states, and the place to start with forming a company in our guide to US company formation.
Our services for Maryland:
We can form your company in six states; our overview of US company formation shows which one fits your plans in Maryland. Any open questions we will answer in a consultation.