Crossed $100,000 in Maryland sales and wondering if you need to collect sales tax? Understanding Maryland’s economic nexus threshold matters; but figuring out when it triggers, how to register, and what happens if you miss it takes time most e-commerce sellers don’t have.
That’s where Hands Off Sales Tax (HOST) comes in. With 25+ years managing multi-state compliance, we handle Maryland nexus analysis, registration, and ongoing filings so you stay compliant without losing focus on growth.
What Is Economic Nexus in Maryland?
Economic nexus is the point where your sales activity in Maryland creates a tax collection obligation, even without physical presence. Before 2018’s Wayfair decision, only businesses with Maryland offices, warehouses, or employees collected sales tax. That changed overnight.
Now, remote sellers must collect once they cross specific thresholds. This applies to all online retailers, marketplace sellers, and out-of-state businesses shipping to Maryland customers. The law took effect October 1, 2018.
Maryland’s Economic Nexus Threshold
Maryland uses dual thresholds: $100,000 or more in gross revenue OR 200 or more separate transactions from Maryland sales during the current or previous calendar year.
Meeting either threshold triggers nexus. Hit $100,000 in 2024? You have nexus. Made 200 transactions to Maryland customers in 2023? You still have nexus in 2024, even if revenue stayed below $100,000.
What Counts Toward the Threshold?
Maryland counts all gross sales delivered into the state, including sales you’d never collect tax on:
- Direct sales to Maryland consumers through your website
- Sales through third-party platforms (even when they collect tax)
- Taxable AND non-taxable items
- Wholesale transactions (even with valid exemption certificates)
- Tax-exempt sales to nonprofits or government
Critical distinction: Maryland includes exempt sales, wholesale transactions, and marketplace-facilitated sales in threshold calculations. Selling $80,000 in tax-exempt groceries plus $25,000 in taxable goods? That’s $105,000 total. You’ve triggered nexus.
Marketplace Facilitator Rules
Platforms like Amazon, eBay, and Etsy collect Maryland sales tax on behalf of third-party sellers. If you sell exclusively through these channels, the facilitator handles the collection. No separate registration needed.
The multi-channel trap: Marketplace sales count toward YOUR personal nexus threshold even though the platform collects tax. Hit $80,000 on Amazon plus $25,000 through your Shopify store? That’s $105,000 combined, so you’ve triggered nexus and must register to collect on your direct sales channels.
When Nexus Triggers
Nexus triggers immediately once you exceed either threshold. Maryland requires registration by the first day of the month following when you meet the threshold.
Example: Your California Shopify store hits $100,150 in Maryland sales in July 2024. You must register by August 1, 2024.
How to Register for Maryland Sales Tax
Registration is straightforward but must happen before you collect your first dollar of Maryland tax.
Registration Process
- Obtain a Maryland SDAT account through the Department of Assessments and Taxation
- Complete the Combined Registration Application online via the BPAS portal
- Receive your sales and use tax license (typically 7-10 business days)
- Update your e-commerce platform with Maryland tax credentials
HOST handles Maryland registration. We complete paperwork, follow up with the state, and ensure you’re properly licensed.
Maryland Filing Requirements
After registration, Maryland assigns filing frequency based on your volume:
- Monthly filers: Businesses collecting more than $15,000/year in Maryland tax
- Quarterly filers: Businesses collecting $15,000 or less annually
Most e-commerce businesses meeting the $100,000 threshold file monthly.
Filing Deadlines
Maryland sales tax returns are due the 20th day of the month following the reporting period:
- January sales → Due February 20
- February sales → Due March 20
Late filing carries penalties of 10% of tax due, plus interest that compounds monthly. Missing deadlines triggers enforcement from Maryland’s Comptroller.
Common Maryland Nexus Mistakes
Ignoring Previous Year Activity
Maryland’s lookback provision catches sellers who had strong previous years. Crossing $100,000 OR making 200+ transactions in 2023 means you have nexus throughout 2024, even if current numbers drop. Many sellers wrongly assume falling below both thresholds eliminates obligations.
Not Tracking All Sales Types
Maryland counts every dollar of gross sales. Taxable, exempt, wholesale, and marketplace-facilitated. Sellers often track only taxable sales and miss that their $95,000 in taxable goods plus $15,000 in exempt sales equals $110,000 total, triggering nexus. Track everything.
Delaying Registration
Registration is required by the first day of the month following when you meet either threshold. Selling into Maryland without registration creates immediate liability. Each sale during this period represents potential exposure.
Skipping Zero Returns
Maryland requires filing even when you collect $0 tax. Miss a zero return and you’ll face penalties identical to missing a return with tax due. Many sellers incorrectly assume no sales means no filing.
Misconfiguring Sales Tax Software
Tools like TaxJar and Avalara require accurate configuration. Common errors include wrong Maryland rates, incorrectly taxing exempt items, and missing nexus start dates.
HOST offers a Free Sales Tax Software Review to catch configuration mistakes before they become audit issues.
Maryland Sales Tax Rates
Maryland’s state sales tax rate is 6%. Unlike many states, Maryland has minimal local variation—most jurisdictions collect only the 6% state rate.
Notable exceptions:
- Alcoholic beverages: 9% rate
- Software as a Service (SaaS) for business use: 3% (effective July 1, 2025)
- Digital products (downloads, streaming): Taxable at 6%
- Most groceries: Exempt
- Prescription drugs: Exempt
- Clothing: Taxable (no exemption threshold)
This simplicity is advantageous. Maryland’s lack of complex local jurisdictions makes compliance easier than states like Colorado or Louisiana.
What Happens If You Don’t Register?
Maryland actively pursues non-compliant remote sellers through data matching programs, nexus questionnaires, and customer use tax notices. For sellers operating without registration, Maryland can assess back taxes for up to 4 years, plus penalties and interest.
One HOST client discovered Maryland nexus 2.5 years late. Through a Voluntary Disclosure Agreement (VDA), we limited lookback to 3 years and abated penalties, saving over $18,000.
Voluntary Disclosure Agreements for Past Nexus
If you’ve been selling into Maryland above the threshold without collecting tax, a VDA limits damage.
VDA Benefits:
- Reduced lookback period (3-4 years instead of full statutory period)
- Penalty abatement (often 100% waived)
- Anonymous filing (until agreement finalizes)
- Structured payment plans
HOST has filed dozens of Maryland VDAs, helping sellers resolve past liabilities efficiently while protecting operations. Earlier address, better outcomes.
HOST: Your Maryland Compliance Partner
Managing Maryland nexus (plus 44 other states) demands expertise most businesses lack in-house. Every hour researching regulations or filing returns is time not spent growing revenue.
What HOST Delivers:
Nexus Analysis: We analyze sales data across all 45 states with sales tax, pinpointing exactly where you’ve triggered nexus, including Maryland’s dual thresholds.
Maryland Registration: We complete your Combined Registration Application and handle state correspondence until you’re licensed.
Ongoing Filing: HOST files your Maryland returns monthly or quarterly, meeting deadlines with accurate calculations.
Software Optimization: We review your TaxJar, Avalara, or Shopify configuration to verify correct Maryland rates and exemption handling.
Notice Management: When Maryland sends confusing letters, we interpret, respond, and resolve issues before escalation.
Audit Defense: If Maryland audits your returns, we organize documentation, defend positions, and minimize liability.
VDA Support: For past Maryland obligations, we file Voluntary Disclosure Agreements to limit lookback and abate penalties.
We’ve focused exclusively on sales tax since 1999. Over 25 years helping businesses navigate multi-state complexity. Through parent company TaxMatrix, we’ve served North America’s largest companies. Now we bring that expertise to e-commerce sellers managing the same challenges.
Ready to Handle Your Maryland Compliance?
Maryland’s dual thresholds are clear; but managing registration, filing, and ongoing compliance while expanding into other states creates real operational burden.
Whether you’ve just crossed Maryland’s threshold, need to catch up on past obligations, or want comprehensive multi-state management, HOST provides expertise to keep you compliant without headaches.
Contact us today to discuss your Maryland sales tax needs or schedule a free consultation. Let us handle Maryland compliance so you focus on growing sales in all 50 states.
Want to learn more? Get our “10 Sales Tax Mistakes E-Commerce Sellers Make” e-book.
Frequently Asked Questions
What is Maryland’s economic nexus threshold for sales tax?
Maryland’s threshold is $100,000 or more in gross revenue OR 200 or more transactions from Maryland sales during the current or previous calendar year. Meeting either threshold triggers nexus.
Do I need to register if I only sell on Amazon?
If you sell exclusively through Amazon FBA or other marketplace facilitators, the platform collects Maryland sales tax on your behalf. You don’t need separate registration unless you also make direct sales exceeding either threshold.
How quickly must I register after crossing Maryland’s threshold?
Maryland requires registration by the first day of the month following when you meet either threshold. Continuing to sell without registration creates immediate compliance issues.
What happens if I crossed Maryland’s threshold last year but not this year?
You still have nexus this year. Maryland’s lookback provision means exceeding either threshold in the previous calendar year maintains your obligation in the current year, regardless of current-year numbers.
Can I resolve past Maryland nexus issues without penalties?
Yes, through a Voluntary Disclosure Agreement (VDA). HOST regularly files Maryland VDAs that limit lookback to 3-4 years and often abate 100% of penalties, helping sellers resolve past obligations while protecting operations.
Does Maryland have local sales taxes I need to track?
Maryland is one of the simpler states. The rate is 6% with minimal local variation. Most jurisdictions only collect the 6% state rate, making Maryland easier to manage than states with hundreds of local jurisdictions.
