MDComp - Business Tips

You can save time and money while avoiding some of the most common filing problems by filling out the Maryland sales and use tax return completely and correctly. Follow the suggestions and instructions in the coupon book or on your sales and use tax return.

Use the form we send you - not a photocopy or a computer-generated report. The magnetic scan line at the bottom of the original form contains data we need to process your return. Failure to use the original form requires special processing for your return.
On line 1, enter the total amount of all your taxable and non-taxable sales and rentals of tangible personal property and of your taxable services.
On line 2, enter the tax you collected or should have collected, less any tax which you properly refunded to your customers for cancelled sales. The amount due will almost always be greater than 6 percent of taxable sales because of the bracket nature of the tax. You can download a rate chart or obtain one from Taxpayer Service.
On line 3, enter the 11½ percent tax due on short-term passenger car and multipurpose vehicle rentals and the 8 percent tax due on short-term truck rentals.
On line 4, combine lines 2 and 3 together and enter the total on this line.
On line 5, enter your discount if you are filing and paying on time. Use the instructions provided with your return. The maximum discount amount is limited to $500.
On line 6, subtract line 5 from line 4 and enter the difference on this line.
On line 7, enter the tax due on your purchases, rentals or use of personal property, including your purchases of merchandise for resale which you have converted to your own use.
On line 8, enter the total taxes due by adding the amounts shown on lines 6 and 7. If the total due is zero, do not mail this return. File over the phone by calling 410-260-7225.
On line 9, you may claim a refund of up to $1,000. If the refund exceeds $1,000, you must pay the full amount due with the return and file Form ST205 - Sales and Use Tax Refund Application to claim the refund. You can also obtain Form ST205 from Taxpayer Service.
On line 10, subtract line 9 from line 8 and enter the difference.
On line 11, enter penalty and interest if your return is not filed by the due date. Follow the instructions provided with your return.
On line 12, enter the balance due after adding the amounts on lines 10 and 11.
On line 13, enter the amount of your payment. You can also file and pay your sales and tax using any of the following methods:
- File online for free using bFile
- Pay by electronic funds transfer. To register, call 410-260-7601.
- Pay by credit card - online through officialpayments.com or over the phone by calling 410-800-2PAYTAX.

Remember

Use the forms we sent you because they are pre-coded. Copies or forms that are computer-generated will not be accepted.
Use your account number in all your correspondence about your sales and use tax account and on checks you remit.
You are required to file a return by telephone at 410-260-7225 if you have no taxable sales to report and owe no tax for the report period. If you do not file on time, you will receive a delinquent notice.
If you have more than one place of business, you need a separate sales and use tax license for each location. You can save time and money by filing a single consolidated return. Contact Taxpayer Service to establish a consolidated account.
Show sales and use tax as a separate item on a sales slip or invoice. Otherwise there is no record that you collected or that your customer paid tax.
Effective January 3, 2008, you may assume and absorb all or any part of the sales and use tax on a retail sale and pay that tax on behalf of the buyer. You must, however, continue to separately state the tax from the sales price at the time of sale to the purchaser. If you absorb all or any part of the tax on the sale, you must pay the tax with the return that covers the period in which you make the sale.
Collect sales and use tax on items that you sell for nonprofit organizations if those items are ordinarily taxable. This is true even if the nonprofit organization would not collect tax on items it sells directly.