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Maryland - Sales and Use Tax Exemptions and Exemption Certificates

Maryland sales and use tax is imposed on retail sales and uses of tangible personal property and taxable services in Maryland. (Tax-General Article§ 11-102)

MARYLAND EXEMPTIONS

Some of the enumerated exemptions are for: Items used for an agricultural purpose; sale of tangible personal property through bulk vending machine; flags, food; interstate or foreign commerce or use in another state; tangible personal property used directly and predominantly in a production activity bituminous concrete, bakery goods (Regulation 03.06.01.32-2); equipment for television or radio signals; certain medicine and medical supplies; health and physical aids; hygienic aids; mobile homes; precious metal bullion and coins; certain products used in printing; newspaper; tangible personal property for use or consumption in research and development; personal, professional, or insurance service; sale to the State or a political subdivision of the State; items taxed by other laws; transportation services; water that is delivered to the buyer through pipes or conduits; computer program that is legally permitted to be and is intended to be reproduced for sale or incorporated in whole or in part into another computer program intended for sale; sale of any energy star product or solar water heater; property or service used directly in film production activity (Regulation 03.06.01.35 ); sale of electricity, fuel, and other utilities used to operate the machinery or equipment used to produce snow for commercial purposes; sale of geothermal equipment, residential wind energy equipment or solar energy equipment; lodging at corporate training center. (Tax-General Article § 11-201 to 11-231)

CAUTION: Sales tax exemptions mentioned above are very briefly described. Please see the exemption statute and the applicable regulations for details. Transactions that do not meet the requirements of the exemption statute and its applicable regulations do not qualify for the sales tax exemptions.

MARYLAND EXEMPTION CERTIFICATES: The person required to pay the sales and use tax has the burden of proving that a sale in the State is not subject to the sales and use tax. To claim a sales tax exemption provided by the Maryland Statute or regulation the buyer must provide the vendor with evidence of an exemption. The vendor may not recognize the exemption unless the buyer provides the vendor with evidence that the buyer has an exemption certificate or the evidence that the Comptroller requires by the regulation. (Tax-General Article§ 11-408)

  • Maryland Resale Certificate:There is no specific form for a resale certificate,however, the certificate must include the buyer's name, address, Maryland sales and use tax registration number, and a signed statement indicating that the purchase of tangible property or taxable service is intended for resale or will be incorporated into a product or service for sale. Vendors may accept resale certificates that bear the exemption certificate number issued to a religious organization instead of a sales and use tax registration number. Sales and use tax exemption certificate numbers issued to religious organizations consist of 8 digits, the first two of which are always "29". Other private exempt entities may not use their exemption certificate numbers on resale certificates. (Regulation 03.06.01.14 )
  • Maryland Exempt Entities: The Comptroller will issue exemption certificates to an entity found to be a nonprofit charitable, educational, or religious organization or a volunteer fire company or department or a volunteer ambulance company or rescue squad located in the State and to other organizations entitled to exemptions on their purchases, upon application for them on a Combined Registration Application. (Regulation 03.06.01.22)
  • COT-CD 132 Real Property Contractor 1 Percent Sales and Use Tax Exemption Certificate A certificate that a contractor furnishes to a vendor for purchases of materials incorporated into real property for contracts entered into prior to January 3, 2008. Since the contracts were entered into prior to that date, the vendor can elect to charge the buyer a 5 percent sales tax rate but is not obligated to. If the seller charges 6 percent, then the buyer can file a refund claim with the Comptroller of Maryland for the 1 percent difference.
  • ST206 Exemption Certification for Utilities or Fuel Used in Production Activities (Regulation 03.06.01.10)

No special forms are needed to claim the machinery and consumable exemptions. If a vendor requires documentation to support a claim for the machinery exemption, a signed form certifying use in production activities may be provided. The consumables exclusion may be supported by a statement in the form of a resale certificate stating that the property will qualify.

MARYLAND EXEMPTION CERTIFICATE VERIFICATION: Sales and Use Tax Number and Exemption Certificate Number

 

 
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