Business Overview
Maryland has strengths in biotechnology, cybersecurity, aerospace, and federal government contracting. The state leverages its highly educated workforce, research institutions, and proximity to Washington D.C. Its strategic location and port facilities support international business operations.
Key Facts & Figures
| Category | Details |
| Capital | Annapolis |
| Major Cities | Baltimore, Columbia, Germantown, Silver Spring, Waldorf |
| State Sales Tax Rate | 6% |
| Local Sales Tax Rate | No local sales tax |
| Corporate Income Tax | Progressive from 3.5% to 8.93% |
| Physical Nexus Threshold | Physical presence including employees, offices, or inventory |
| Economic Nexus Threshold | $100,000 in annual sales or 200 transactions |
Did you know?
Maryland has the highest concentration of cybersecurity companies in the United States, with over 500 cybersecurity firms located in the state.
Setup & Compliance
Maryland offers centralized business registration with specific compliance requirements.
Maryland Business Formation Steps:
- Choose Your Business Structure: Consider Maryland’s tax environment for different entity types.
- Register Your Business: File formation documents with the Maryland Department of Assessments and Taxation.
- Register for Tax Accounts: Register with the Comptroller’s Office for sales tax and withholding.
- Obtain Required Licenses: Secure necessary state and local business licenses.
- Register as an Employer: Register with the Department of Labor if hiring employees.
Ongoing Compliance Requirements:
- Annual Reports and Personal Property Tax Returns: Maryland entities must file combined annual reports and personal property tax returns.
- Sales Tax Collection: Collect and remit 6% state sales tax on taxable transactions.
- Corporate Income Tax: Corporations pay 8.25% corporate income tax.
- Employment Taxes: Employers must register for unemployment insurance and workers’ compensation.
- Trade Name Registration: Businesses operating under a name different from the legal entity name must register a trade name.
Hiring & Payroll
Maryland provides comprehensive worker protections with several state-specific regulations.
Maryland Payroll Taxes:
- Unemployment Insurance: Rates from 0.3% to 7.5% on first $8,500 of wages.
- State Income Tax Withholding: Required based on MW507 form with local county taxes also applying.
- Workers’ Compensation: Required for all employers.
Maryland Employment Laws:
- Minimum Wage: $13.25 per hour for employers with 15+ employees; $12.80 for smaller employers (increasing to $15.00 by 2025/2026).
- Paid Sick Leave: Employers with 15+ employees must provide 1 hour for every 30 hours worked, up to 40 hours annually.
- Equal Pay for Equal Work: Prohibits wage discrimination based on gender.
- Ban-the-Box Law: Prohibits asking about criminal history on initial job applications.
- Maryland is not a right-to-work state.
State Incentives
Maryland provides comprehensive economic incentives to support business innovation.
Key Business Incentives:
- More Jobs for Marylanders Program: Tax credits for job creation and capital investment.
- Research and Development Tax Credit: Supports innovative company development.
- Biotechnology Investment Incentive Tax Credit.
Small Business & Startup Support:
- Maryland Small Business Development Center: Comprehensive business consulting.
- Opportunity Zones: Tax benefits for investments in designated areas.
- Minority Business Enterprise Certification Program.
Regulatory Considerations
Maryland maintains detailed regulatory standards across business sectors.
Key Business Regulations:
- Data Privacy: Comprehensive laws protecting business and consumer information.
- Environmental Compliance: Regulations protecting the Chesapeake Bay ecosystem.
- Professional Licensing: Required for various service-based professions.
Additional Regulatory Areas:
- Biotechnology and Research Industry Compliance.
- Government Contracting Regulations.
Business Overview
Maryland has strengths in biotechnology, cybersecurity, aerospace, and federal government contracting. The state leverages its highly educated workforce, research institutions, and proximity to Washington D.C. Its strategic location and port facilities support international business operations.
Key Facts & Figures
| Category | Details |
| Capital | Annapolis |
| Major Cities | Baltimore, Columbia, Germantown, Silver Spring, Waldorf |
| State Sales Tax Rate | 6% |
| Local Sales Tax Rate | No local sales tax |
| Corporate Income Tax | Progressive from 3.5% to 8.93% |
| Physical Nexus Threshold | Physical presence including employees, offices, or inventory |
| Economic Nexus Threshold | $100,000 in annual sales or 200 transactions |
Did you know?
Maryland has the highest concentration of cybersecurity companies in the United States, with over 500 cybersecurity firms located in the state.
Setup & Compliance
Maryland offers centralized business registration with specific compliance requirements.
Maryland Business Formation Steps:
- Choose Your Business Structure: Consider Maryland’s tax environment for different entity types.
- Register Your Business: File formation documents with the Maryland Department of Assessments and Taxation.
- Register for Tax Accounts: Register with the Comptroller’s Office for sales tax and withholding.
- Obtain Required Licenses: Secure necessary state and local business licenses.
- Register as an Employer: Register with the Department of Labor if hiring employees.
Ongoing Compliance Requirements:
- Annual Reports and Personal Property Tax Returns: Maryland entities must file combined annual reports and personal property tax returns.
- Sales Tax Collection: Collect and remit 6% state sales tax on taxable transactions.
- Corporate Income Tax: Corporations pay 8.25% corporate income tax.
- Employment Taxes: Employers must register for unemployment insurance and workers’ compensation.
- Trade Name Registration: Businesses operating under a name different from the legal entity name must register a trade name.
Hiring & Payroll
Maryland provides comprehensive worker protections with several state-specific regulations.
Maryland Payroll Taxes:
- Unemployment Insurance: Rates from 0.3% to 7.5% on first $8,500 of wages.
- State Income Tax Withholding: Required based on MW507 form with local county taxes also applying.
- Workers’ Compensation: Required for all employers.
Maryland Employment Laws:
- Minimum Wage: $13.25 per hour for employers with 15+ employees; $12.80 for smaller employers (increasing to $15.00 by 2025/2026).
- Paid Sick Leave: Employers with 15+ employees must provide 1 hour for every 30 hours worked, up to 40 hours annually.
- Equal Pay for Equal Work: Prohibits wage discrimination based on gender.
- Ban-the-Box Law: Prohibits asking about criminal history on initial job applications.
- Maryland is not a right-to-work state.
State Incentives
Maryland provides comprehensive economic incentives to support business innovation.
Key Business Incentives:
- More Jobs for Marylanders Program: Tax credits for job creation and capital investment.
- Research and Development Tax Credit: Supports innovative company development.
- Biotechnology Investment Incentive Tax Credit.
Small Business & Startup Support:
- Maryland Small Business Development Center: Comprehensive business consulting.
- Opportunity Zones: Tax benefits for investments in designated areas.
- Minority Business Enterprise Certification Program.
Regulatory Considerations
Maryland maintains detailed regulatory standards across business sectors.
Key Business Regulations:
- Data Privacy: Comprehensive laws protecting business and consumer information.
- Environmental Compliance: Regulations protecting the Chesapeake Bay ecosystem.
- Professional Licensing: Required for various service-based professions.
Additional Regulatory Areas:
- Biotechnology and Research Industry Compliance.
- Government Contracting Regulations.
