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Taxes

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Filing and paying business taxes can be complicated. The following information is provided to help you get started. It is important to consult with an attorney and a certified public accountant to make sure you are meeting your tax obligations.

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Montgomery County Business Taxes

Montgomery County’s Department of Finance administers taxes that certain types of businesses must pay. Check the description column to see if a tax applies to your business.

There are many tax credit programs available for Montgomery County businesses. These programs are designed to encourage certain economic activities in the County and you can find them on our Business Funding & Incentives webpage.

General
Tax Description Department
Bag All businesses in Montgomery County that provide customers a plastic or paper carryout bag at the point of sale must charge 5 cents per bag. (Consumers can avoid the 5-cent charge by using their own reusable bags.)

You can pay the tax via the Bag Tax Payment and Registration System. 		Environmental Protection
Business Personal Property A Business Personal Property Tax bill is issued after a business tax return has been reviewed by the State of Maryland. Businesses are automatically registered to pay these taxes when they are formed and file their Articles of Organization or Incorporation with the State. The minimum fee to file a business personal property tax is $300 per year.  

Most businesses must file their annual business personal property taxes with Montgomery County’s Department of Finance by April 15. 		Finance
Development Impact Development Impact Taxes fund improvements necessary to support increased transportation and education capacity created by development. This tax is set by the Montgomery County Council and assessed on new residential and commercial buildings and additions to commercial buildings in the County.  

Development Impact Taxes are due before a building permit is issued. 		Permitting Services
Excise Excise Taxes are imposed on the manufacture and distribution of certain consumer goods in Montgomery County. Examples include electronic cigarette tax, fuel energy tax, room rental (transient) tax, and telephone tax.  Finance
Payroll Payroll Taxes are assessed by the State. The County has no payroll taxes or separate payroll registration process. Not applicable (see Maryland Payroll)
Transfer & Recordation Tax bills must be paid before a property transfer (e.g. the sale of a property) or mortgage refinancing can take place. Finance

City of Gaithersburg
Tax Description
City of Gaithersburg City of Gaithersburg charges businesses a real and personal property tax. The amounts charged are based on the City’s tax rates and the value of the properties. Certain manufacturing and technology-related businesses and those located in certain designated might be eligible for tax credits or exemptions.

City of Rockville
Tax Description
City of Rockville City of Rockville charges businesses a real and personal property tax. The amounts charged are based on the City’s tax rates and the value of the properties. Certain manufacturing and technology-related businesses and those located in certain designated might be eligible for tax credits or exemptions.

City of Takoma Park
Tax Description
Economic Development City of Takoma Park charges businesses a real and personal property tax. The amounts charged are based on the City’s tax rates and the value of the properties. Certain manufacturing and technology-related businesses and those located in certain designated might be eligible for tax credits or exemptions.

Maryland Business Taxes

Businesses should review information from the Maryland Comptroller's Office, which administers several types of business taxes. The Comptroller’s Office links for different tax categories listed below have detailed information and important regulations about each tax type.

Tax Description
Admissions and Amusement The Admissions and Amusement tax is a local tax that is collected by the Maryland Comptroller's Office. The tax is imposed on the gross receipts from admissions, the use or rental of recreational or sports equipment and the sale of merchandise, refreshments or services at a nightclub or similar place where entertainment is provided.
Alcohol Under the Maryland Alcohol Tax laws, the Revenue Administration Division is responsible for monitoring the manufacture, storage, transportation, sale and distribution of alcoholic beverages and tobacco in Maryland.
Boxing and Wrestling The Boxing or Wrestling Tax is remitted to the Comptroller's office on the Admissions and Amusement tax return. The tax is imposed on gross receipts derived from charges for admission to a boxing or wrestling contest in the State; and charges, by ticket or per event or occasion basis, to view a telecast of a boxing or wrestling contest in the State regardless of the origin of the telecast.
Business Personal Property In many Maryland jurisdictions, businesses are taxed on business-owned personal property such as furniture, fixtures, office and industrial equipment, machinery, tools, supplies, inventory and any other property not classified as real property.

Businesses are automatically registered to pay these taxes when they are formed and file their Articles of Organization or Incorporation with the State. The minimum fee to file a business personal property tax is $300 per year.

A Business Personal Property Tax bill is issued after the return is reviewed by the State of Maryland. The tax is paid through the Montgomery County Department of Finance.
Income tax Business taxpayers can check these links to find important information about filing Business Income Tax if they are Corporations, Pass-through entities, or Sole proprietorships.
Motor Fuel The Comptroller of Maryland's Motor Fuel Tax unit administers state laws and regulations for all motor fuels through the State’s Revenue Administration Division.
Payroll (Income) Employers making payments to resident or nonresident individuals for salaries, wages or other compensation (including benefits), have the responsibility to withhold income taxes and submit a report to the Comptroller of Maryland.
Sales and Use Businesses in Maryland are required to collect Maryland's Sales Tax and or Alcoholic Beverage Tax on taxable purchases.
Sole Proprietorships Sole proprietorships or general partnerships must obtain a Tax ID Number through Maryland Business Express so that their business personal property can be properly assessed.
Tobacco The Processing Control Unit of the Maryland Revenue Administration Division is responsible for processing tobacco tax returns and related payments. In coordination with the Assistant Attorney General, the Unit reviews and compiles reported activity by licensed tobacco wholesalers as required by the Master Settlement Agreement (MSA), as well as prepares deposits for incoming revenue related to the Tobacco Tax.
Transportation Network Company Assessments The Processing Control Unit of the Maryland Revenue Administration Division is responsible for processing tobacco tax returns and related payments. In coordination with the Assistant Attorney General, the Unit reviews and compiles reported activity by licensed tobacco wholesalers as required by the Master Settlement Agreement (MSA), as well as prepares deposits for incoming revenue related to the Tobacco Tax.

Federal Business Taxes

All businesses except partnerships must file an annual income tax return with the Federal government. Partnerships file an information return. The form used depends on how the business is organized. It is important to check with an attorney and a certified public accountant to make sure you understand all of your firm’s potential tax credits and liabilities.

Tax Description
Business The form of business determines what Business Taxes must be paid and how to pay them. The general types of business taxes are: Income Tax, Estimated Taxes, Self-Employment Tax, Employment Taxes, and Excise Tax.