Maryland
Taxes and business formation • USA 2025–2026
TL;DR
Maryland at a glance — 2026 figures
State filing fees and tax position for individuals and companies registered in Maryland.
| Parameter | Value |
|---|---|
| Personal income tax | See the income tax section below |
| LLC formation fee | $155.00 |
| LLC annual report fee | $300.00 |
| LLC annual report deadline | April 15 |
| LLC dissolution fee | $0.00 |
| Corporation formation fee | $176.00 |
| Corporation annual report fee | $300.00 |
State filing fees are set by the Secretary of State and change without notice — the official source is linked in each section below. Federal figures for tax year 2026 are on the 2026 tax cheat sheet.
Updated: August 2026
Corporation in Maryland
Tax system of Maryland
Income Tax
Maryland uses a progressive personal income tax at the state level, ranging from 2% to 5.75% depending on income. However, Maryland's key feature is an additional local income tax levied by counties and cities. It can range from 2.25% to 3.3%, which makes the combined tax rate for individuals one of the highest in the U.S. — up to 8.95%. All major sources of income are taxed: wages, business income, rental income, and dividends.
Sales Tax
Maryland's base sales tax rate is 6%, and unlike other states, local jurisdictions do not add surcharges. The tax applies to the sale of most goods and a number of services (including short-term rentals, digital goods, software, repair work, and more).
Property Tax
Property tax is set at the state and county level. The base state rate is 0.112%, but the main tax is levied at the county level, and the combined effective rate averages about 1.04% of market value. In areas with high population density and active infrastructure programs (for example, in Montgomery and Prince George's counties), the tax can be higher. The Homestead Tax Credit, benefits for seniors, veterans, people with disabilities, and low-income families are available.
Business Taxes
C-corporations in Maryland are subject to a Corporate Income Tax at a flat rate of 8.25% on taxable income. However, all business entities are required to file annual reports (Annual Report / Personal Property Return). The filing deadline is April 15 each year.
Excise Taxes
Maryland levies excise taxes on alcohol, gasoline, tobacco, car rentals, and short-term accommodations. The state also has a tax on telecommunications and digital services, including the Digital Advertising Tax — a special tax on income from online advertising (for companies with global revenues above $100 million).
Favorable Tax Conditions
Despite high personal and corporate income tax rates, Maryland offers a well-developed system of tax incentives and credits, including programs to encourage innovation, hiring, investment in economic development zones, and small business support. For business owners, a key advantage is the absence of a franchise tax and the moderate sales tax rate with no local surcharges, which simplifies calculation.
Compared to Other States
Maryland has one of the highest combined personal income tax rates, especially due to the local component. However, the sales tax is lower than in most other high-tax states (for example, California or Illinois) and does not fluctuate between regions. The corporate income tax rate is higher than in the Carolinas, Missouri, or Arizona, but lower than in New Jersey or Pennsylvania. Maryland does not levy a separate franchise tax, but it does require business property reports and annual fees. The state also imposes a tangible personal property tax on businesses — companies must file a Property Return listing the value of equipment, furniture, machinery, and other assets. This creates additional reporting burden, especially for retail, manufacturing, and office-based businesses.
Frequently asked questions
Does Maryland have a personal income tax?+
Yes. Maryland levies a personal income tax on residents. The current rates and brackets are set out in the income tax section on this page, with a link to the state tax authority — rates are revised by the legislature, so always check the official source before filing.
How much does it cost to register an LLC in Maryland?+
The state filing fee in Maryland is $155.00. On top of that you need a registered agent with a physical address in the state, and FinTaxes charges from $299 for the formation service itself.
When is the annual report due for a Maryland LLC?+
The Maryland annual report fee is $300.00, due April 15. Missing it typically triggers a late penalty and, if left unresolved, administrative dissolution of the company.
Do I need to live in Maryland to open an LLC there?+
No. You do not need to live in Maryland — or in the United States at all — to own an LLC registered there. Non-residents can form and own a US LLC; what the state requires is a registered agent with a physical in-state address. Your own tax residency is a separate question and decides which returns you file.
Can FinTaxes file my Maryland state return remotely?+
Yes. FinTaxes prepares and e-files federal and Maryland state returns entirely remotely, for clients anywhere in the US or abroad, as an Authorized IRS e-file Provider.
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