Maryland has a graduated state individual income tax, with rates ranging from 2.00 percent to 6.50 percent, plus local income taxes that can add up to 3.3 percent. Maryland has a flat 8.25 percent corporate income tax rate, a 6.00 percent state sales tax rate, and an average combined state and local sales tax rate of 6.00 percent. Maryland has a 0.92 percent effective property tax rate on owner-occupied housing value. Maryland has both an estate tax and an inheritance tax. Maryland’s gas tax is 46.21 cents per gallon, and its cigarette excise tax is $5.00 per pack of 20 cigarettes.
Maryland raises tax revenue primarily through individual income taxes (39.7 percent of total state and local tax revenue), property taxes (23.6 percent), and other taxes (19.1 percent). Maryland collects $8,139 in state and local tax collections per capita, carries $9,884 in state and local debt per capita, and has a 75 percent funded ratio of public pension plans. Maryland’s tax system ranks 46th overall on the 2026 State Tax Competitiveness Index.
Each state’s tax code is a multifaceted system with many moving parts, and Maryland is no exception. Use the tabs below to compare Maryland taxes with other states and to see how Maryland raises tax revenue. You can also browse our tax maps, which are compiled from our annual publication, Facts & Figures 2026: How Does Your State Compare?
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The State Tax Competitiveness Index enables policymakers, taxpayers, and business leaders to gauge how their states’ tax systems compare. While there are many ways to show how much state governments collect in taxes, the Index evaluates how well states structure their tax systems and provides a road map for improvement.
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Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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Individual income taxes are a major source of state government revenue, accounting for more than a third of state tax collections. How do income taxes compare in your state?
9 min read
Retail sales taxes are an essential part of most states’ revenue toolkits, responsible for nearly a quarter of combined state and local tax collections.
18 min read
Forty-four states levy a corporate income tax, with top rates ranging from a 2 percent flat rate in North Carolina to an 11.5 percent top marginal rate in New Jersey. Four states—Georgia, Nebraska, North Carolina, and Pennsylvania—reduced their corporate income tax rates effective January 1, 2026.
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Property taxes are the primary tool for financing local governments. While no taxpayers in high-tax jurisdictions will be celebrating their yearly payments, property taxes are largely rooted in the benefit principle of taxation: the people paying the property tax bills are most often the ones benefiting from the services.
9 min read
With so many federal changes occurring in such a short amount of time—including some federal provisions changing more than once and a major change to the treatment of UC income occurring in the middle of tax filing season—state legislators have faced the challenge of responding to these changes quickly in order to provide certainty to taxpayers.
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New Yorkers faced the highest burden, with 14.1 percent of income in the state going to state and local taxes. Connecticut (12.8 percent) and Hawaii (12.7 percent) followed.
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Our updated 2021 edition of Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more.
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Here’s each state’s estimated revenue gains or losses in 2020, alongside the state and local aid that would be allocated to each under the American Rescue Plan Act.
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Congress chose to exempt forgiven Paycheck Protection Program (PPP) loans from federal income taxation. Many states, however, remain on track to tax them by either treating forgiven loans as taxable income, denying the deduction for expenses paid for using forgiven loans, or both.
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Individual income taxes are a major source of state government revenue, accounting for 37 percent of state tax collections in fiscal year (FY) 2017. Several states had notable individual income tax changes in 2020: Arizona, Arkansas, Massachusetts, Michigan, Minnesota, North Carolina, Ohio, Tennessee, Virginia, and Wisconsin.
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In addition to its economic impact on Maryland businesses and the likelihood of serious legal challenges, Maryland’s proposed digital advertising tax is incredibly vague on vital definitions, creating uncertainty about where revenue is sourced and when it is subject to the tax.
17 min read
The potential override of Gov. Larry Hogan’s (R) veto of a digital advertising tax (HB732) looms large over the current legislative session in Maryland, though it is only one of many tax proposals under consideration in the state.
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States compete with each other in a variety of ways, including in attracting (and retaining) residents. Sustained periods of inbound migration lead to (and reflect) greater economic output and growth. Prolonged periods of net outbound migration, however, can strain state coffers, contributing to revenue declines as economic activity and tax revenue follow individuals out of state.
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With most states experiencing reduced tax revenues due to the coronavirus pandemic, several are contemplating whether recreational marijuana legalization and taxation may be one avenue to raise new revenue. While states that have already legalized do raise meaningful revenue, lawmakers should remember that establishment of legal markets takes time.
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