TAX & LICENSE / STATE TAX SYSTEM

State Income Tax
Taxable income for Maryland is generally calculated in the same way as the federal income tax and must be filed by April 15. The state’s graduated income tax is imposed at the following rates:
*           2% on the first $1,000 of taxable income
*           3% of the second $1,000
*           4% on the third $1,000
*           5% on taxable income over $3,000
*           6% on taxable income over $100,000

Retail Sales Tax
The State of Maryland imposes sales and use taxes of 5 percent on tangible personal property, lodging, accommodations and special order production. Exemptions include medicine and medical supplies, grocery items, items purchased for resale, and certain machinery and vehicles used for manufacturing and agriculture.

Alcohol and Tobacco Taxes
The Maryland excise tax rates on alcoholic beverages are $1.50 per gallon of distilled spirits, $.40 per gallon of wine, and $.09 per gallon of beer. The tobacco tax rate is $.36 per pack of 20 cigarettes.

Property Tax
Real property is assessed at approximately 40 percent of fair market value. The state tax rate is $.21 per $100 of assessed value. Maryland’s assessment system is based on a three-year cycle where one-third of all taxable real property is reviewed every year. Under this Triennial Assessment Law, owners only receive an assessment notice every three years.

County Tax and Finance Office

Kent County
410-778-7478
www.kentcounty.com

Queen Anne’s County
410-758-4098
www.qac.org

Dorchester County
410-228-7291
www.dorchestercountymd.com

Caroline County
410-479-0410
www.carolinemd.org

Wicomico County
410-548-4840
www.wicomicocounty.org

Somerset County
410-651-0440
www.somersetmd.us
Worcester County
410-632-1194
www.co.worcester.md.us

Talbot County
410-819-5920
www.talbotcountymd.gov

Homestead Exemption
Property tax credit is available to those who are100 percent disabled veterans or 100 percent blind. A credit is allowed to homeowners who earn up to $36,000, elderly or disabled homeowners and also renters.

Inheritance and Estate Taxes
An inheritance tax is imposed on the beneficiary’s right to receive property distributed by will or by state law. Jointly owned property passing to a surviving spouse and the proceeds from insurance policies paid to another beneficiary are not subject to the inheritance tax. The rate is 1 percent on inheritances to direct descendants and the surviving spouse and 10 percent to other beneficiaries. Estate Tax is calculated by deducting the amount of the inheritance tax paid to the Registrar of Wills from the credit for state death taxes allowed on the Federal Estate Tax return.

Maryland Tax Information

Department of Assessments and Taxation
301 West Preston Street, Room 806
Baltimore 410-767-1184
Toll Free 877-634-6361
http://dat.maryland.gov

Department of Comptroller
800-MD-TAXES
Refund Status 800-218-8160
www.marylandtaxes.gov