How does Maryland’s tax code compare? Maryland has a graduated individual income tax, with rates ranging from 2.00 percent to 5.75 percent. There are also jurisdictions that collect local income taxes. Maryland has a 8.25 percent corporate income tax rate. Maryland has a 6.00 percent state sales tax rate and does not levy any local sales taxes. Maryland’s tax system ranks 46th overall on our 2023 State Business Tax Climate Index.
Each state’s tax code is a multifaceted system with many moving parts, and Maryland is no exception. The first step towards understanding Maryland’s tax code is knowing the basics. How does Maryland collect tax revenue? Click the tabs below to learn more! You can also explore our state tax maps, which are compiled from our annual publication, Facts & Figures: How Does Your State Compare?
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Recreational marijuana taxation is one of the hottest policy issues in the U.S. Currently, 19 states have implemented legislation to legalize and tax recreational marijuana sales.
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The first-in-the-nation digital advertising tax was recently struck down by a Maryland circuit court on three separate grounds. Other states might want to avoid getting themselves into this situation in the first place.
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While changes to federal cannabis law are slow, changes at the state level are accelerating. Recreational cannabis is on the ballot in five states this November—Arkansas, Maryland, Missouri, North Dakota, and South Dakota—giving voters the ability to join 19 states that have already legalized recreational marijuana.
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While there are many ways to show how much is collected in taxes by state governments, our Index is designed to show how well states structure their tax systems by focusing on the how more than the how much in recognition of the fact that there are better and worse ways to raise revenue.
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IRS and Census data show that people and businesses favor states with low and structurally sound tax systems, which can impact the state’s economic growth and governmental coffers.
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When examining tax burdens on businesses, it is important to consider both federal and state corporate taxes. Corporate taxes are one of the most economically damaging ways to raise revenue and are a promising area of reform for states to increase competitiveness and promote economic growth, benefiting both companies and workers.
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Property taxes are the primary tool for financing local government and generating state-level revenue in some states as well.
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The mix of tax sources states choose can have important implications for both revenue stability and economic growth, and the many variations across states are indicative of the different ways states weigh competing policy goals.
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The FDA’s proposal to ban flavored cigars would carry significant revenue implications for many state governments.
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A marriage penalty exists when a state’s income brackets for married taxpayers filing jointly are less than double the bracket widths that apply to single filers. In other words, married couples who file jointly under this scenario have a higher effective tax rate than they would if they filed as two single individuals with the same amount of combined income.
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