Retailers and the Bring Your Own Bag Law

What is the Bring Your Own Bag Law and when did it start?

The Bring Your Own Bag Law amends the County’s current law related to the use of plastic and paper carryout bags. The law takes effect January 1, 2026.

The most significant changes in the new law are an increase in the bag tax to 10 cents (of which the retailer gets to keep 5 cents) and a prohibition on the use of plastic carryout bags.

Businesses located in some municipalities in Montgomery County are exempt from the prohibition on the use of plastic bags.

What happens when a customer makes a purchase and wants a carryout bag?

Retailers must not provide plastic bags to customers who want a carryout bag but may provide a paper bag for 10 cents or a reusable bag for a tax. The bag charge also applies to purchases made over the phone/Internet/fax when the customer is having the purchase(s) delivered in a bag provided by the store. Cashiers are encouraged to ask whether a bag is needed before bagging their purchases. 

What about self-service check out transactions?

Retailers must program self-service checkout counters to factor in the plastic bag ban and paper carryout bag tax.

Can customers avoid the bag charge?

Yes. Customers may bring their own bags to carry out purchases.

What requirements must retailers consider when distributing reusable bags?

Reusable carryout bags must include stitched handles specifically designed and manufactured for multiple reuses and is made of cloth or other washable fabric, or a durable material that is not made of plastic film.

Is there a requirement to provide a customer credit program for bags that the customer voluntarily brings into the store?

No. However, retail establishments may continue voluntarily offering their customers credit for any bags which customers themselves bring to the store to carry out their purchases.

I own a thrift store or an antique store and give out once-used bags that are turned in by patrons. Am I required to charge the 10-cent tax on this?

Once-used bags such as those given out at thrift and antique stores are subject to the County's plastic bag ban and bag tax if they are given out at the checkout counter to customers to carry out purchases.

Do I charge customers for paper carryout bags if they pay for food purchases with food stamps?

A retail establishment may not charge or collect a paper [plastic] carryout-bag tax on any transaction in which any portion of the purchase is paid for with a food assistance program. If a customer uses a food assistance program to pay for any part of the transaction, the bag tax does not apply.

Who must collect and remit to the County the 10-cent charge for paper carryout bags?

Retail establishments in Montgomery County must collect and remit the charge. These establishments include all stores, service stations, grocery stores, department stores and other sellers with retail outlets. To help defray the costs of tracking, reporting and submitting bag charges to the County, retailers retain 5 out of every 10 cents collected per paper bag.

What is the County doing with the money collected from the Bring Your Own Bag Law?

Money collected will be deposited into the County's Water Quality Protection Charge fund. Revenues will be dedicated to fighting litter and pollution in Montgomery County.

What are the penalties for violating this law?

Retail businesses that do not comply with the Bring Your Own Bag Law are subject to civil citations and fines

What agency is responsible for enforcing this law?

The Department of Environmental Protection is responsible for enforcing retail establishments' compliance with respect to reporting and submission of payments.

Are any bags exempt from the Bring Your Own Bag Law?

Yes. Plastic carryout bag does not include:

• a plastic bag provided by a pharmacist that contains a prescription drug
• any newspaper bag or bag intended for garbage, pet waste, or yard waste
• a bag provided at the point of sale at seasonal event, such as an occasional farmer’s market, a full-time retail operation located on a farm, a street fair, a yard sale
• a bag used to package bulk items, including fruit, vegetables, nuts, grains, candy, ice, or small hardware items
• a bag that contains hanging garments or dry-cleaned clothes, including suits, jackets, or dresses
• a bag or plastic bag sleeve used to contain or wrap a perishable item, including meat or fish, or unwrapped prepared foods or bakery goods
• a bag used to take live fish, insects, mollusks, crustaceans, or amphibians away from the retail establishment
• a bag used to package items for the purpose of charitable food distribution.

Paper carryout bag does not include:

• a paper bag provided by a pharmacist that contains a prescription drug
• a bag used to take live fish, insects, mollusks, or crustaceans away from a retail establishment
• a paper bag that a restaurant gives a customer to take prepared or leftover food or drink from a restaurant
• a paper bag containing prepared food provided at the drive-through window of a restaurant
• a paper bag provided at a mobile food truck that contains prepared food
• a paper bag provided for food delivery that is collected by a third-party delivery service to carry the purchased item
• any paper bag intended for garbage, pet waste, or yard waste
• a bag used to package bulk items, including fruit, vegetables, nuts, grains, candy, ice, or small hardware items
• a bag that contains hanging garments or dry-cleaned clothes, including suits, jackets, or dresses
• a bag or paper bag sleeve used to contain or wrap a perishable item, including meat or fish, or unwrapped prepared foods or bakery goods
• a bag provided at the point of sale at seasonal event, such as an occasional farmer’s market, a full-time retail operation located on a farm, a street fair, a yard sale
• a bag used to package items for the purpose of charitable food distribution

The bag we provide for customers to carry out their purchases is heavy-duty, thick, and durable and may easily be reused. Is the bag exempt from the Bring Your Own Bag Law?

All plastic bags provided to customers at the point of sale are prohibited -- irrespective of their size, thickness, or durability.

Reusable carryout bags may be sold, but the bags must include stitched handles specifically designed and manufactured for multiple reuses and is made of cloth or other washable fabric, or a durable material that is not made of plastic film.

Are paper bags used in liquor stores to carry out bottles exempt from the Bring Your Own Bag Law?

No. The paper bags given out at check-out counters to carry out bottles are subject to the bag law and must be charged at 10 cents per bag.

Which bags used by restaurants are exempt from the Bring Your Own Bag law?

A bag or plastic bag sleeve used to contain or wrap a perishable item, including meat or fish, or unwrapped prepared foods or bakery goods is exempt from the plastic bag ban.

A paper bag that a restaurant gives a customer to take prepared or leftover food or drink from a restaurant, a paper bag containing prepared food provided at the drive-through window of a restaurant, a paper bag provided at a mobile food truck that contains prepared food, or a paper bag provided for food delivery that is collected by a third-party delivery service to carry the purchased item are exempt from the bag tax.

If my business does not provide bags to customers, must I file any payment form to be in compliance with the Bring Your Own Bag Law?

No. If you are not providing carryout bags to customers in your business, you are not required to register your business on the payment website nor file any payment form since your business does not collect any bag taxes to remit.

Are businesses in all municipalities in Montgomery County required to follow the new Bring Your Own Bag Law?

If a municipality has adopted Chapter 48 or passed their own plastic bag ban, then all retailers in that municipality must comply with the Bring Your Own Bag Law requirements.

If a municipality has NOT adopted Chapter 48 of the Montgomery County Code or adopted a plastic bag ban, businesses in that municipality may continue to use plastic carryout bags, but they must impose a 10-cent tax on all paper and plastic bags distributed.

The municipalities that have not adopted Chapter 48 or adopted a plastic bag ban are:

• Town of Barnesville
• Chevy Chase Village
• Chevy Chase Sec. 3
• City of Gaithersburg
• Town of Garrett Park
• Town of Glen Echo
• Village of Martin’s Addition
• Town of Somerset
• Town of Washington Grove

If I am selling a perishable item (such as a tub of ice cream or a loaf of bread), do I have to charge the bag tax?

When the law refers to bags used to package bulk or perishable items, it is talking about the types of bags that you find in the produce section of the supermarket for customers to bag loose items—e.g, green beans, nuts—or the types of bags that might be used to wrap what is ordered at the deli counter, seafood counter, or fresh meat counter.

Plastic bags cannot be provided at the checkout counter, and if the perishable item is placed in a paper bag at the checkout counter the bag is subject to the 10-cent tax.

When do I remit the bag tax to the County?

Each retail establishment must remit 5 cents of the tax collected for all paper carryout bags provided to a customer during the previous quarter, except for those bags exempt from the ban.

The remittance must be accompanied by a report of all transactions that involve paper bags subject to the law. The report must contain the number of paper bags supplied to customers for which a tax was collected, the number of paper bags supplied to customers for which a tax was not collected, and the amount of tax required to be collected. An owner of more than one retail establishment must identify the remittance for each location by name and address. 

How do I remit payment?

A secure tax payment portal has been set up for submission of bag law taxes. Elements required for payment are retailers' identity information and the total number of bags given out in the reporting period. The following steps are required in the payment submission system:

1. On the secure Bag Tax payment portal, set up a user name and password.
2. Set up the retailer's identity information (federal tax id number or Maryland business license number)
3. Submit the period of payment (e.g., January 2012) and then state the number of carryout bags customers have taken under the Bag Law (e.g, 2,500).
4. The system will calculate the tax for you based on 5 cents per bag (since retailers retain 5 cents).
5. Proceed to the payment system; you can use a direct bank deposit (ACH).

The remittance must be accompanied by a report of all transactions that involve paper bags subject to the law. The report must contain the number of paper bags supplied to customers for which a tax was collected, the number of paper bags supplied to customers for which a tax was not collected, the amount of tax required to be collected. An owner of more than one retail establishment must identify the remittance for each location by name and address. 

How is the carryout bag charge recorded?

A retail establishment must indicate on the customer's transaction receipt the number of carryout bags that the retail establishment provided to the customer and the total charge levied at a rate of 10 cents per bag.For SNAP/WIC purchases, the receipt must indicate the number of bags given that are exempt from the tax.

What is the official wording that must be displayed on the store receipt?

There is no requirement for specific wording on the customer’s receipt in the Law but the customer’s receipt must show the number of bags and the amount of the tax. The County recommends “Montgomery County carryout bag charge” or “Carryout bag charge” or “Bag Tax” (as space permits). 

For SNAP/WIC purchases, the receipt must indicate the number of bags given that are exempt from the tax.

Can a store itemize carryout bags on the customers' sales receipts but not charge their customers?

The store may only do this if the customer paid with SNAP/WIC. For SNAP/WIC purchases, the receipt must indicate the number of bags given that are exempt from the tax.

For other transactions, the customer's transaction receipt must indicate both the number of carryout bags provided to the customer and the total amount of money collected for the bags. Also, the law requires the retail establishment to collect the tax from the customer at the time customer pays for the goods.

Can a store credit be used to cover the customers' bag charges?

Yes. A store credit can be used to cover any amount owed by a customer to a retail establishment.

Is the bag tax taxable under State Law?

No. Neither the 5-cent County bag tax remitted to the County nor the 5-cent retained by retail establishments for administrative costs is subject to the State Sales and Use Tax. For further information on this issue, email the State Comptroller at  [email protected] or phone 1-800-638-2937.

When customers pay for purchases and pick up items in the store, how do we collect the 10-cent charge since they have already paid?

Any paper bag that the retail establishment provides to the customer to carry out the online purchases is subject to the bag tax and must be rung up at the cash register and recorded as bag taxes. Retailers may wish to ask the customer when they place their order if the customer needs a bag, so retailers can include the bag tax with the total purchase price.

What is the definition of a restaurant in the law?

Restaurant means any lunchroom, café, or other establishment located in a permanent building for the accommodation of the public, equipped with a kitchen containing facilities and utensils for preparing and serving meals to the public, and outfitted with or without a public dining area. A restaurant does not include any area of a supermarket, department store, or other retail establishment beyond the kitchen and public dining area.

Are there any special exemptions from the Bring Your Own Bag Law that apply to restaurants?

Yes. Restaurants may not collect the tax from customers for paper bags used to carry out prepared or leftover food or drink.

How is the County publicizing the Bring Your Own Bag Law to residents and businesses?

The County is conducting a broad-based public education campaign to inform Montgomery County businesses and residents about the bag law. The County is providing materials to retailers that advertise the bag law for use in stores and at cash registers (such as decals, posters and notices). The County is also conducting a free bag distribution program to lower income households. The goal of the outreach is to help ensure that residents and retailers are fully informed about the law.