Maryland's sales tax rate and what it covers

Maryland charges a 6% sales tax on most goods and services you buy in the state. This is the base rate that applies statewide. Some counties add their own local tax on top of this — Baltimore City adds 1%, and several other counties add between 0.5% and 1% — so your total rate depends on where you make the purchase.

The 6% applies to clothing, electronics, furniture, groceries (with exceptions), and most other tangible items. It also applies to certain services like haircuts, dry cleaning, and repairs. When you buy something at a store or online from a Maryland seller, the tax is usually added at checkout and shown on your receipt.

Not everything is taxed. Prescription medications, unprepared food you buy at a grocery store, and certain medical equipment are exempt. The rules around what counts as "unprepared food" versus prepared food (which is taxed) can be specific — for example, a rotisserie chicken from a grocery store is taxed, but raw chicken is not.

Key Takeaways

  • Maryland's base sales tax is 6%, and some counties add 0.5% to 1% more depending on where you live or shop.
  • Sales tax applies to most goods and many services, but not to prescription drugs, unprepared groceries, or certain medical devices.
  • Online purchases from Maryland sellers are subject to sales tax; out-of-state sellers may or may not charge it depending on their business structure.
  • The tax is calculated on the sale price before any discounts or coupons are applied in most cases.
  • Certain organizations like nonprofits and government agencies may be exempt from paying sales tax on their purchases.

County-level tax rates in Maryland

While the state rate is 6%, your actual tax rate depends on which county you're in when you make the purchase. Baltimore City has the highest combined rate at 7% (6% state plus 1% local). Most other Maryland counties add between 0.5% and 1% to the state rate.

The following counties have local additions: Anne Arundel, Baltimore County, Carroll, Cecil, Charles, Dorchester, Frederick, Garrett, Harford, Howard, Kent, Montgomery, Prince George's, Queen Anne's, Somerset, Talbot, Washington, and Wicomico. Each adds a different amount, ranging from 0.5% to 1%. If you shop near a county line, the rate that applies is the one in the county where the store is located, not where you live.

Online purchases are taxed based on where the seller is located or where the item is shipped to, depending on the seller's tax registration. If you order from a Maryland-based online retailer, Maryland tax applies. If you order from an out-of-state retailer, that retailer may or may not charge Maryland tax depending on whether they have a physical presence or sales nexus in Maryland.

What items are taxed and what are not

Most physical goods are taxed, but food is the biggest exception. Unprepared food — raw meat, vegetables, bread, milk, eggs, canned goods — is not taxed. Prepared food is taxed: that includes restaurant meals, deli items, hot foods from a grocery store, and beverages like soda and juice. The line between prepared and unprepared can be unclear; when in doubt, the receipt will show whether tax was charged.

Clothing and footwear are taxed in Maryland. Prescription medications are not taxed, but over-the-counter drugs and vitamins are. Medical equipment like wheelchairs, crutches, and hearing aids may be exempt depending on the specific item and how it's classified. Newspapers and magazines are not taxed. Gasoline is taxed, but the tax is included in the pump price you see.

Services are taxed differently depending on the type. Haircuts, manicures, dry cleaning, and car repairs are taxed. However, labor that is part of a larger transaction — like installation labor bundled into a furniture purchase — may be taxed as part of the whole sale rather than separately. Legal services, accounting services, and medical services are generally not subject to sales tax.

How sales tax is calculated on your purchase

Sales tax is calculated on the sale price of the item. If an item costs $100 and the tax rate is 6%, you pay $6 in tax for a total of $106. Discounts and coupons are usually applied before tax is calculated, so if you have a $10 coupon, the tax is calculated on $90, not $100. However, some retailers calculate tax first and then apply the discount — the receipt will show the order.

When you buy multiple items, each taxable item is taxed individually at the rate that applies to that item. If you buy a shirt (taxed), a sandwich (taxed), and a newspaper (not taxed), the tax applies only to the shirt and sandwich. The total tax on your receipt is the sum of tax on all taxable items.

For large purchases or special orders, the tax is still calculated the same way — on the sale price at the time of purchase. If you buy something and the price changes before you pick it up or receive it, the tax is based on the price you agreed to, not the new price.

Who does not have to pay sales tax

Certain organizations are exempt from paying sales tax on their purchases. These include federal, state, and local government agencies; nonprofit organizations with a valid exemption certificate; and certain religious organizations. Schools and universities are typically exempt when buying for school purposes. A nonprofit must register with the Maryland Department of Revenue and receive an exemption certificate to use when making purchases.

Resellers — businesses that buy goods to resell to customers — do not pay sales tax on those purchases. Instead, they provide a resale certificate to the seller, and the tax is collected from the end customer. This prevents tax from being charged twice on the same item.

If you are a business owner or work for an exempt organization, you will need to register and obtain the proper certificate before you can make tax-free purchases. The process varies depending on the type of organization, and the Maryland Department of Revenue handles registration.

Sales tax on online and mail orders

When you order online from a Maryland-based retailer, Maryland sales tax applies to your order. The retailer collects the tax and sends it to the state. The tax rate is based on where the item is shipped to — so if you order something to be delivered to Baltimore City, the 7% rate applies.

When you order from an out-of-state retailer, whether Maryland tax applies depends on whether that retailer has a physical location or significant sales activity in Maryland. Large national retailers like Amazon typically have Maryland operations and collect Maryland tax on orders shipped to Maryland residents. Smaller out-of-state retailers may not collect Maryland tax, even though technically Maryland residents are supposed to report and pay "use tax" on those purchases when filing their state tax return — though this is rarely enforced for individual purchases.

Mail orders and phone orders follow the same rule as online orders: tax is based on the seller's location and the delivery address. If you order by mail from a Maryland company, Maryland tax applies. If you order from out of state, the retailer's tax obligations depend on their nexus in Maryland.

Frequently Asked Questions

Is there a sales tax holiday in Maryland?

Maryland does not have a statewide sales tax holiday. Some states offer back-to-school or holiday shopping periods when sales tax is waived, but Maryland does not. However, certain items like prescription medications and unprepared food are always exempt from sales tax regardless of when you buy them.

Do I pay sales tax on services like haircuts or car repairs?

Yes. Haircuts, manicures, dry cleaning, car repairs, and similar personal services are subject to Maryland sales tax. The tax is calculated on the service charge and is usually added to your bill. Medical and legal services are generally not taxed, but most consumer services are.

What is the difference between sales tax and use tax?

Sales tax is collected by the seller when you buy something. Use tax is a tax you owe on items you buy from out-of-state sellers who do not collect Maryland tax. Technically, Maryland residents are supposed to report and pay use tax on their state tax return, but it is rarely enforced for individual purchases. Businesses are more likely to be audited on use tax.

Can I get a refund of sales tax if I return an item?

Yes. When you return an item and receive a refund, the sales tax is refunded along with the purchase price. The refund appears on your receipt or credit card statement. If you exchanged the item for something else, tax is recalculated on the new item based on its price.

Do I pay sales tax on groceries in Maryland?

Unprepared groceries — raw meat, fresh produce, bread, milk, canned goods — are not taxed. Prepared foods like deli items, hot foods, and restaurant meals are taxed. Beverages like soda and juice are taxed, but milk and water are not. Check your receipt to see which items were taxed.