Maryland sales tax: rates, digital products & SUT-202 filing
Maryland is one of the few US states with a flat statewide rate (6%) AND aggressive digital-products taxation. The 2021 expansion under HB 932 brought SaaS, streaming subscriptions, and downloaded software into the tax base — making Maryland one of the easiest states for rate calculation but one of the harder ones for SaaS sellers to remember to register in. Alcohol gets a 9% rate; everything else is 6%.
The Maryland numbers at a glance
| Field | Value |
|---|---|
| Base state rate | 6.0% (flat — no local sales tax) |
| Alcohol rate | 9.0% (alcohol surcharge + base) |
| Economic nexus | $100,000 OR 200 transactions (prev or current calendar year) |
| SaaS taxable? | Yes — since March 14, 2021 under HB 932 |
| Digital products taxable? | Yes — ebooks, music, video downloads, streaming subscriptions |
| Marketplace facilitator | $100,000 / 200 transactions — facilitator collects, you don't |
| Monthly deadline | 20th of next month via Maryland Tax Connect |
The 2021 digital products expansion — and what's still taxable
House Bill 932 (effective March 14, 2021) expanded Maryland's sales tax base to include 'digital products' and 'digital codes'. The expansion explicitly covers:
- Downloaded prewritten computer software
- SaaS and remotely-accessed prewritten software
- Streaming subscriptions (Netflix, Spotify, Disney+, Apple Music)
- Downloaded ebooks, music files, movies, video games
- Cloud storage tied to prewritten software
- Ringtones, mobile apps, in-app purchases
Exempt: custom software developed for a single customer, pure data services (research databases without software access), and professional services not bundled with software.
Important context: Maryland also passed a separate Digital Advertising Tax at the same time, which was struck down in federal court in 2024 (Comcast v. Comptroller). The digital products sales-tax expansion (HB 932) is a different law and remained intact. Don't confuse the two.
The 9% alcohol rate — separate from food and standard goods
Maryland adds a 3% alcohol surcharge to the 6% base for an effective 9% rate on all alcoholic beverages. This applies across:
- Restaurant + bar alcohol sales
- Off-premise liquor / wine / beer store sales
- Hotel mini-bar beverages
- Catered events
The 9% rate applies at point of sale to the final consumer; the rate doesn't compound through the distribution chain. For restaurants, HelloBooks tags alcohol-category items in the menu / inventory; a mixed invoice (a customer ordering pasta + a glass of wine) gets 6% on the pasta and 9% on the wine automatically.
Marketplace facilitator and the SUT-202 mechanics
Maryland's marketplace facilitator rules took effect October 2019, requiring marketplaces above the $100K / 200-transaction threshold to collect and remit on third-party seller transactions. Amazon, Etsy, eBay, Walmart, and Shopify Markets all comply. Sellers still register and file SUT-202; marketplace sales appear as a deduction line on the return so the gross revenue ties to financial reporting without double-counting tax.
How HelloBooks does this
HelloBooks handles every Maryland-specific quirk — flat 6% rate with 9% alcohol surcharge, the 2021 digital products / SaaS expansion, marketplace deductions, and SUT-202 filing by the 20th via Maryland Tax Connect.
- 1
Register with the Maryland Comptroller
Apply for a Sales and Use Tax license via Maryland Tax Connect (free). You'll get a Central Registration Number and filing-frequency assignment. Enter both into HelloBooks.
- 2
Connect sales channels with MD flagged
Tag the customer's ship-to state. HelloBooks applies the flat 6.0% rate on most sales and the 9.0% rate on alcohol — no ZIP-level rate lookup needed for the standard 6% line since Maryland has no local sales tax.
- 3
Charge digital products + SaaS at 6%
Tag products as digital / SaaS / prewritten software in the item master. HelloBooks applies the 6% rate on digital products (downloaded software, ebooks, music, streaming subscriptions, SaaS subscriptions) effective March 14, 2021. Custom software stays exempt.
- 4
Charge alcohol at 9% — separate from food
For restaurant + bar businesses, HelloBooks tags alcohol-category items and applies the 9% rate while food gets 6%. Mixed invoices (a customer ordering food + drinks) get the right rate per line. The split is critical for restaurant audits.
- 5
File the SUT-202 by the 20th
HelloBooks builds the SUT-202 return draft with 6% sales, 9% alcohol sales, marketplace deductions, and use tax on out-of-state purchases. Monthly deadline is the 20th. E-file via Maryland Tax Connect, mark paid in HelloBooks.
Frequently asked questions
What is the Maryland sales tax economic nexus threshold?
$100,000 in cumulative gross sales OR 200 separate transactions delivered into Maryland during the previous or current calendar year. The OR test means whichever you hit first triggers nexus. Register with the Maryland Comptroller and start collecting on the first sale after registration.
What is the Maryland sales tax rate?
Maryland is a flat-rate state at 6.0% on most tangible personal property, services, and digital products — no local sales tax. Exception: alcohol is taxed at 9% (a 3% alcohol surcharge added to the 6% base). Short-term rentals of motor vehicles, certain mobile-home rentals, and specific other categories have their own dedicated rates. The flat-rate structure makes Maryland one of the simplest US states for rate determination on most goods.
Does Maryland tax SaaS and digital products?
Yes. Maryland expanded the sales tax base to digital products and digital codes effective March 14, 2021 under House Bill 932. Digital products include downloaded music, ebooks, movies, video games, AND streaming subscriptions (Netflix, Spotify, etc.). SaaS is taxable as a 'digital product' for canned/prewritten software accessed remotely. Custom software is exempt. Maryland is one of the most aggressive SaaS-and-digital-products taxing states.
What is Maryland's destination-sourcing rule?
Maryland is destination-sourced — the rate is determined by the buyer's location. Since Maryland has a flat 6.0% rate on most items statewide, destination doesn't matter much for rate calculation. The 9% alcohol rate applies regardless of destination within Maryland. The destination rule still matters for sourcing rules under SSUTA-aligned standards.
What changed with Maryland's digital products tax in 2021?
House Bill 932 (effective March 14, 2021) expanded the sales tax base to include 'digital products' — downloaded software, ebooks, music, movies, streaming subscriptions, and SaaS access to prewritten software. The expansion brought Maryland in line with about half the SSUTA states that already taxed digital. Implementation was contentious: a state digital advertising tax law passed at the same time was challenged in federal court and struck down in 2024 (Comcast v. Comptroller), but the digital products sales-tax expansion remained intact.
How does the Maryland marketplace facilitator law work?
Maryland requires marketplace facilitators with $100,000+ in Maryland sales or 200+ transactions to collect and remit on behalf of third-party sellers. Amazon, Etsy, eBay, Walmart, and Shopify Markets in Maryland are facilitators. Sellers still register and file the SUT-202, showing marketplace sales as a deduction. Facilitator threshold matches seller nexus.
How often do Maryland sales tax returns get filed?
The Comptroller assigns frequency by liability: monthly for sellers with monthly liability over $100, quarterly for $50-100/month, semi-annually for $20-50/month, annually for under $20/month. Monthly returns on Form SUT-202 are due the 20th of the following month. E-file via Maryland Tax Connect (formerly bFile).
What are the most common Maryland sales tax mistakes?
(1) Treating SaaS subscriptions as exempt — Maryland's 2021 expansion explicitly covers cloud-accessed prewritten software. (2) Not charging the 9% alcohol rate — restaurants and bars routinely under-collect by applying 6% to beverages. (3) Treating streaming subscriptions as exempt services — they became taxable in 2021. (4) Missing the 20th-of-month SUT-202 deadline. (5) Confusing the (struck-down) digital advertising tax with the (still-valid) digital products sales tax.
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Authoritative sources
US tax rules change every filing season. Always verify the current position with the official sources below before filing.
- IRS — irs.govInternal Revenue Service. Forms, publications, due dates, and current-year thresholds for federal income tax, payroll tax, and 1099 reporting.
- IRS — Forms & InstructionsCanonical PDF forms (W-4, W-9, 1099-NEC, 1040-ES, 941, 940, W-2, W-3) with current-year instructions.
- SSA — Business Services OnlineSocial Security Administration portal for W-2 / W-3 e-filing, EIN verification, and AccuWage validation.
- Streamlined Sales Tax — streamlinedsalestax.orgMulti-state Streamlined Sales and Use Tax Agreement (SSUTA) — registration in 24 SST member states with one application.
- Tax Foundation — Sales Tax & NexusIndependent state-by-state research on sales tax rates, economic nexus thresholds, and franchise / margin tax structures.
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