Maryland lesson 5 of 6
Maryland state taxes, licences and permits
Maryland does not impose a separate LLC franchise tax, but members who are Maryland residents pay state and county income tax on their share of the LLC's profits, and many businesses need a trade or professional licence on top of formation.
Income tax for members
An LLC taxed as a partnership or sole proprietorship passes its income through to members, who report it on their personal returns. Maryland residents pay the graduated state income tax plus a local county or city income tax on top, so the combined marginal rate can run well above the state rate alone. Confirm your current bracket and county rate with the Comptroller of Maryland before you budget.
Sales and use tax and other registrations
If you sell taxable goods or certain services in Maryland, register for a sales and use tax licence with the Comptroller before making sales. If you hire employees, register for unemployment insurance with the Maryland Department of Labor and for employer withholding with the Comptroller.
Licences and permits
Maryland has no single statewide general business licence that covers every LLC. Licensing requirements depend on your trade, your county and sometimes your municipality. Check with your county's licensing office and any relevant state licensing board for your industry.
Key takeaways
- There is no separate Maryland LLC franchise tax, but member income tax includes a local add-on.
- Register for a sales and use tax licence with the Comptroller before selling taxable goods or services.
- Licensing is trade and county specific, not a single statewide requirement.
Frequently asked questions
Does Maryland tax LLCs directly?
A standard LLC taxed as a partnership or disregarded entity does not pay a separate state entity-level income tax. Income passes through to members, who pay Maryland state and local income tax on their share.
Official sources
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Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team