If you sell taxable products or services in Maryland, you’ll need a Maryland sales tax permit before collecting any sales tax from customers. Whether you’re a new e-commerce business, opening a storefront, or expanding into Maryland from another state, registering for a sales and use tax license is a legal requirement. But the process can feel confusing—especially with changing rules around digital goods, software, and economic nexus.
In this guide, we’ll walk you through the step-by-step registration process and highlight how Hands Off Sales Tax (HOST) can help you stay compliant every step of the way.
Do You Need a Maryland Sales Tax Permit?
If your business sells into Maryland, you need to determine whether you must register—and why recent rule changes make it more important than ever.
Nexus Triggers: Economic & Physical Presence
You must register for a Maryland sales tax permit if either applies:
- Your gross sales into Maryland exceed $100,000 in a calendar year
- You complete 200 or more sales transactions in Maryland during the current or previous year
You may also trigger physical nexus by maintaining a physical presence in Maryland, such as:
- A storefront, office, warehouse, or stored inventory
- Employees or independent contractors working in sales, marketing, or support within the state
What Goods & Services Require a Permit?
If nexus is established, you must collect and remit on all taxable goods and services sold to Maryland customers. This includes tangible goods, digital products, and certain services.
New: 3% Tax on Tech, Data & Software Services (Effective July 1, 2025)
Starting July 1, 2025, Maryland imposes a 3 % sales and use tax on the following services:
- Data or information technology services under NAICS sectors 518 and 519
- IT consulting services in subsector 5415
- System or application software publishing services under NAICS 5132
You must assess whether your offerings fall under these NAICS definitions, regardless of the code you report to the IRS or on income tax forms.
Overview: Types of Permits & Fees
Here’s what you need to know about Maryland sales tax permits—including one-time vendor licenses and associated fees:
Permanent Sales & Use Tax Permit
- Maryland issues only one type of permanent permit: the Sales & Use Tax License.
- There is no application fee, and the permit does not require renewal once issued .
Transient (Temporary) Vendor Permits
- If you’re selling taxable goods at a temporary location—such as a roadside stand, craft fair, or pop‑up sale—you must display a transient vendor license in addition to holding a permanent permit .
- These licenses are free, valid for 90 days (or until the printed expiration date), and automatically renewed if your account stays active and in good standing .
When to Use a Temporary License
- Vendors participating in three or fewer events per year may opt for the temporary license instead of registering for a permanent permit .
- To obtain one, you can either apply online or contact the Comptroller’s Taxpayer Service team directly by phone or email .
Step‑by‑Step: Applying via Maryland Tax Connect
Here’s a complete walkthrough on registering for your Maryland sales tax permit through the Maryland Tax Connect portal—from account creation to confirmation.
a. Create a Maryland Tax Connect Account
Begin at the Tax Connect homepage and click “Create a Maryland Tax Connect Profile” under Quick Links. You’ll need to provide an email address, set a password, and answer security questions. When you submit, you’ll receive a temporary password via email. Upon first sign-in, you’ll set up a unique PIN and complete account verification steps to secure access.
b. Complete the Combined Registration Application
Once logged in, select “Combined Registration Application” under the business registration section. This online form allows you to simultaneously register for multiple state accounts, including the Sales & Use Tax License. You select relevant taxes during registration—ensure you check the box for Sales & Use Tax License before proceeding.
c. Information You’ll Need to Provide
Be prepared to enter:
- Business entity type and legal trade name
- Business start date and principal NAICS code (for resale tax purposes)
- Owner or officer details, including name and contact information
- Sales nexus information indicating physical or economic presence in Maryland
d. Submit & Expect Confirmation
After submitting your application, you’ll receive a Combined Registration Number (CRN). Processing typically takes 5–7 business days, with the number sent via mail. This CRN serves as your official sales tax account identifier and is required for filing and compliance.
Handling Tech / Digital Services: MPU Certificate Strategy
Here’s what you need to know about using an MPU certificate to manage Maryland’s new tax on digital and IT services—especially if your business uses those services in multiple states.
What Triggers an MPU Certificate
If a digital, data, IT, or software service (under NAICS codes 518, 519, 5415, or 5132) is used in and outside Maryland, buyers may use an MPU (Multiple Points of Use) Certificate. Presenting this at the time of sale shifts the tax obligation from the seller to the buyer, who must remit tax only on the Maryland share of use.
New Regulatory Guidance: Who Must Apply & When
- Effective July 1, 2025, the new guidance requires buyers to authorize their account to issue MPU certificates for each transaction through Maryland Tax Connect.
- For installment contracts, one MPU certificate covers all payments. For subscription-based sales, each payment is treated as a separate sale—requiring recurring MPU certificates unless apportionment remains unchanged.
Steps to Apply and Assign an MPU Certificate
- Ensure your business holds a Maryland sales and use tax account via Tax Connect.
- Email [email protected] with your name and registration number to enable the MPU certificate feature.
- Submit a separate certificate per transaction via Tax Connect, noting whether the purchase is a subscription.
Recordkeeping & Best Practices
- Use a consistent apportionment method, such as employee count or license usage inside vs. outside Maryland.
- Vendors must verify MPU certificates online during sale using the buyer’s CRN via Maryland Tax Connect.
- Buyers and sellers should retain MPU certificates for at least four years in case of audit.
Common Pitfalls & Best Practices
Let’s examine the most frequent compliance mistakes businesses make in Maryland and how to avoid them.
1. Missing Nexus Triggers
Businesses often overlook nexus created by meeting economic thresholds—more than $100,000 in sales or 200 transactions annually—and fail to register promptly. This delay can lead to penalties, back taxes, and interest charges.
2. Neglecting Zero‑Return or MPU Filings
Even with no sales taxable in a period, zero returns are mandatory. Failing to submit them may lead to a $25 penalty or higher depending on system updates . Similarly, businesses may neglect to collect and issue needed MPU certificates—especially for digital or tech services used across multiple states—missing exemptions or shifting tax obligations incorrectly.
3. Misunderstanding Temporary Permit Rules
Firms sometimes rely on transient vendor permits when they should obtain a permanent permit, based on frequency or volume of sales at events. This error can leave them out of compliance if the temporary license criteria are exceeded.
4. Outdated or Inaccurate Business Details in Tax Connect
Failing to keep NAICS codes, business structure, owner information, or nexus locations current in Tax Connect leads to misassigned filing frequencies and errors in compliance obligations, complicating audit response and filings.
Best Practices Checklist
- Monitor nexus thresholds regularly and register as soon as criteria are met.
- File zero‑returns automatically, even when no tax is due.
- Stay vigilant with MPU certificate tracking and issuance for applicable digital/service sales (especially for NAICS 518, 519, 5415, 5132).
- Review and update NAICS codes, nexus triggers, and owner contact info within Maryland Tax Connect at least annually—or whenever a significant change occurs.
Being proactive in these areas helps reduce compliance risk, avoid penalties, and maintain an accurate, audit‑ready sales tax account.
Why Businesses Trust HOST with Maryland Sales Tax Compliance
Sales tax compliance in Maryland can be complex—especially with evolving rules around digital services, filing obligations, and exemption certificates. Hands Off Sales Tax (HOST) helps businesses take the guesswork out of the process.
End-to-End Registration Support
HOST assists businesses with sales tax registration in Maryland through the Combined Registration Application on Maryland Tax Connect. They ensure that all required information—business structure, nexus details, NAICS codes—is filed accurately from day one.
Ongoing Filing & Zero-Return Compliance
Once registered, HOST manages all required sales tax filings, including zero-return submissions when no tax is due. This helps clients avoid common penalties and late fees triggered by missing filings.
Expert Handling of MPU Certificates
For SaaS and tech companies impacted by Maryland’s new tax rules, HOST offers guidance on Multiple Points of Use (MPU) certificates—ensuring correct documentation, timing, and recordkeeping.
Audit-Ready, Human-Led Support
HOST’s approach isn’t just automated. Their team of experts monitors changes in Maryland tax law, helps resolve notices, and keeps clients audit-ready with accurate, up-to-date filings.
Whether you’re just expanding into Maryland or managing tax in multiple states, HOST gives you the peace of mind that comes from reliable, expert-driven compliance.
Conclusion: Get Sales Tax Right the First Time
Maryland’s sales tax rules—especially with recent updates affecting tech and digital services—can trip up even experienced business owners. From nexus triggers to MPU certificates, staying compliant requires more than good intentions. That’s why so many businesses choose Hands Off Sales Tax (HOST) to handle registrations, filings, and ongoing compliance with confidence. If you’re selling into Maryland or planning to expand, don’t risk costly mistakes. Get in touch with HOST today and make sales tax one less thing to worry about.
Frequently Asked Questions (FAQs)
1. Who needs a Maryland sales tax permit?
Any business with physical presence in Maryland or exceeding $100,000 in sales or 200 transactions in the state annually must register. This includes remote sellers, e-commerce brands, and service providers subject to Maryland’s expanding tax laws.
2. Is there a fee to apply for a Maryland sales tax permit?
No. The Sales & Use Tax License is issued free of charge by the Maryland Comptroller. There’s no application fee, and the permit does not require renewal, as long as your account remains active and in good standing.
3. How long does it take to receive the Maryland permit?
Once you submit the Combined Registration Application through Maryland Tax Connect, it typically takes 5–7 business days to receive your Combined Registration Number (CRN) by mail. This CRN serves as your official sales tax account ID.
4. What are MPU certificates and who needs them?
MPU (Multiple Points of Use) certificates are used when digital or IT services are consumed in multiple states. Businesses buying software, subscriptions, or tech services that span jurisdictions may issue MPU certificates to apportion tax liability properly.
5. Do I need to file a return even with no sales?
Yes. Maryland requires all registered businesses to file zero-returns during periods with no taxable sales. Failing to do so can result in penalties, account suspension, or forced closure—even if no tax was actually owed for that period.
