Taxation in Maryland

Updated on Thursday 13th September 2018

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Entrepreneurs from abroad who are interested in opening a business in Maryland should observe the legal requirements in terms of taxation. One should know that there is no federal income tax for standard limited liability companies in Maryland, however, the income distributed to non-resident partners is levied with an income tax rate of 8.25%. Information about how you can start a company in Maryland and the taxes imposed for each type of structure can be presented by our team of company formation agents in USA.

What is the federal income tax rate for partnerships in Maryland?

Partnerships established in Maryland by foreign investors need to pay the federal income tax rate of 7.5% applied to the incomes registered by each member. If the partnership is an entity, then the federal income tax rate is set at 8.25%. These rates are applicable only for entrepreneurs who are not residents in Maryland.

What is the sales tax rate in Maryland?

The standard sales tax in Maryland is set at 6% rate and it is applicable to all products and services for sale purposes on the market. Maryland aligns with other American states that do not impose their own city sales tax.

Is there a privilege tax in Maryland?

No, there is no privilege tax and franchise tax for companies in Maryland.  The following tax matters are connected to the businesses operated in Maryland, as follows:
  • corporations in Maryland are taxed at a rate of 8.25% as a corporate income tax;
  • sole proprietorships in Maryland are levied on the business income as individuals (a rate of 4.75% is applicable for incomes between $3,000 and $100,000);
  • several deductions and credits are available for taxpayers in Maryland if contributions are made to local institutions (colleges, schools);
  • the property tax rate is 1.10% and it is applicable for buildings in Maryland.

We invite you to get in touch with our team of company formation specialists in USA if you are an investor from abroad who wants to open a company in USA, including  Maryland. You might want to read the general guide to company incorporation in Maryland with information about how you can register a company in this state.

Please contact our team of company incorporation representatives in USA and ask for support and guidance for business formation and tax matters.