Maryland Tax Nexus

Businesses with nexus in Maryland are required to register with the Comptroller of Maryland and to charge, collect, and remit the appropriate tax.

Generally, a business has nexus in Maryland when it has a physical presence there, such as a retail store, warehouse, inventory, or the regular presence of traveling salespeople or representatives. However, out-of-state sellers can also establish nexus in the ways described below.

Maryland nexus for out-of-state sellers

The Comptroller of Maryland has published clear guidelines for how nexus applies to out-of-state vendors. It interprets the law regarding out-of-state vendors and sales and use tax “as broadly as is permitted under the United States Constitution,” explaining: “It is our position that the U.S. Constitution does not require an out-of-state vendor to have a substantial physical presence in the taxing state for the state to require that vendor to collect sales and use tax. All that is required is for the out-of-state vendor to demonstrate more than a ‘slightest presence’ in the taxing state.”

Out-of-state vendors are therefore required to register with the Comptroller of Maryland and file sales and use tax returns if any of the following is true:

  • The vendor permanently or temporarily maintains, occupies or uses any office, sales room, distribution, storage facility or other place for the sale of tangible personal property or a taxable service directly or indirectly through an agent or subsidiary

  • The vendor has an agent, canvasser, representative, salesman or solicitor operating in this state for the purpose of delivering, selling, or taking orders for tangible personal property or a taxable service

  • The vendor enters the state on a regular basis to provide service or repair for tangible personal property

See the Maryland Comptroller: Sales and Use Tax; Nexus Information for Sales and Use Tax; and Maryland Code Ann. § 11-701 (2015).