With lawmakers focused heavily on the state budget for the fiscal year, and where they might increase their revenues, we decided to take an In Focus look at what exactly Maryland already taxes, and how it compares to the other states.
While every state handles taxes differently, there are many that are comparable across state lines.
Maryland taxes in many different areas, as most states do. Here's a list of some of what Maryland taxes:
- Income
- Property
- Sales and Use
- Alcohol
- Tobacco
- Cannabis
- Motor Fuel
- Inheritance and Estate
- Digital Advertising Gross Revenues
- Boxing and Wrestling
Using data from both the Maryland Comptroller's Office and the Tax Foundation, we were able to see how Maryland compares in terms of many of these kinds of taxes.
Income Tax
Income tax is especially tricky to compare because in many states there are several different tiers or brackets of tax rates based on how much income you have. Some states have no income tax at all.
First, we took a look at the highest tiers in every state, for those falling into the highest tax bracket. For Maryland, that's any individual making over $250,000, and for any joint filers making over $300,000. (These rates are for individuals.)
And then we took a look at what the tax rate would be for someone who earns the median US income for an individual, which is $39,982.
Here's the full tax bracket for Maryland Income Taxes for 2024 from the Maryland Comptroller's Office
Property Tax
Property Taxes vary widely even within states. Different local jurisdictions have vastly different rates for property taxes. In Maryland, Baltimore City has the highest with more than 2.2 cents per 100 dollars of real property value and Montgomery County has the lowest with .67 cents per 100 dollars. That's added on to the state's real property tax of .112 cents per 100 dollars.
Because of the high degree of variability, the Tax Foundation uses 'effective property tax rate' to compare state by state. That is the total taxes that have been paid divided by the total home value.
Sales (and Use) Tax
Maryland's sales and use tax is 6 percent and has been so since 2008. Maryland's tax also applies to use, meaning if you buy something out of state to bring here, you're supposed to still pay this tax in Maryland
"Every time you purchase taxable tangible goods, whether in person, over the phone, or on the Internet, the purchase is subject to Maryland's 6 percent sales and use tax if you use the merchandise in Maryland. If you make a tax-free purchase out of state and need to pay Maryland's 6 percent use tax, you should file the Consumer Use Tax Return."
-Comptrollers Office, Sales and Use Tax FAQs
We took a look at how the different states' sales taxes compare to each other. Alaska, Montana, Oregon, New Hampshire, and Delaware all do not have a sales tax.
Alcohol, Tobacco, and Cannabis Taxes
Alcohol is taxed by type in many states.
Beer, wine, and distilled spirits all have different tax rates.
In Maryland, the initial rate for the beer tax is 9 cents per gallon, wine is 40 cents per gallon, and distilled spirits are $1.50 per gallon. The Tax Foundation, in comparing different states' alcohol taxes, included sales taxes specific to alcohol for Maryland and other applicable states, which is why the numbers are different.
You can see the different alcohol tax rate maps by using the arrows.
Tobacco is taxed by packs of 20 cigarettes and recently went up in Maryland to $5 per 20-pack.
In most states where recreational marijuana is legalized, it is also taxed. In the third quarter of 2024, Maryland reported that it collected more than $18 million from cannabis taxes.
Motor Fuel Tax
Each state taxes gasoline per gallon. Combined with the national tax on gas, we took a look at how Maryland compares to the other states.
Other Taxes
According to the Tax Foundation, Maryland is the only state that has both an Estate Tax and an Inheritance Tax.
An estate tax is imposed when a person's estate is transferred after death, and can't be more than 16%, according to the Comptroller's Office.
The top possible inheritance tax rate is 10%, and for people who died after July 1, 2000, only applies to property passing to individuals outside of the family.
The Digital Advertising Gross Revenues Tax is relevant to almost no one. It requires people who make over $100 million, before taxes to pay 2.5% of the revenue made specifically from digital advertising in taxes. It scales up from there to people who make $15 billion globally to pay 10% of that digital ad revenue in taxes. Maryland appears to be the only state to have this kind of tax.
Local jurisdictions collect admissions and amusement tax for things like tickets to sporting events or amusement parks, refreshments or services at nightclubs, or other places of similar entertainment. The state charges a tax on the revenues made on admission to or the viewing of a telecast of a boxing or wrestling match.
You can find more information from the Comptroller's Office about both individual taxes and business taxes.