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STARTING AND OPERATING A BUSINESS IN MARYLAND Copyright © 2009, Michael D. Jenkins CHAPTER 18
CONTENTS OF THIS CHAPTER:
I. INTRODUCTION Maryland has a fairly typical tax and legal structure under which businesses must operate. Like most states, Maryland imposes an income tax on both individuals and corporations, a sales and use tax, and various excise taxes, with property taxes imposed at the local level. The state has also adopted a limited liability company (LLC) law, and a limited liability partnership (LLP) law, so that businesses operating in Maryland in LLC or LLP form may obtain the advantages of limited liability, without incorporating or becoming subject to corporate taxation, generally. There is no general corporate franchise tax on capital in Maryland, unlike most states, and the Maryland franchise tax on financial institutions was repealed, for tax years starting after in 2001 or later. UPDATE NOTE: If you have done business in other states, you might find the nomenclature for some of Maryland's government agencies a bit confusing. For example, in most states, incorporation papers and similar documents are filed with the secretary of state, but in Maryland, the secretary of state's office has little to do with businesses. Those functions (and most property tax matters) are instead administered by the State Department of Assessments and Taxation (SDAT). From that name, you might conclude that the SDAT must be the main taxing agency in Maryland, but it is not. Income taxes, sales taxes, and most other state taxes are administered by the Comptroller of Maryland's office (formerly known as the Comptroller of the Treasury, until a few years ago), although SDAT does administer property taxes. Keeping the foregoing in mind should reduce your confusion and help you get started off on the right foot, if you are new to doing business in the state of Maryland. Until recently, the state's economy had been very robust, in terms of the level of unemployment, average per capita income levels, and other economic measures. For example, in April, 2008, the state's unemployment rate was only 4%, up only slightly 3.4% a year earlier. However, because of the deepening national recession, by April, 2009 the Maryland unemployment rate had soared to 6.8%, although it remained significantly better than the national unemployment rate of 8.9% for that month. To view the latest federal Bureau of Labor Statistics unemployment rate data for Maryland or any other state, visit the BLS website. The Maryland statutes may be viewed online, if you wish to do your own research, at the Maryland Legislature's web site. II. LEGAL ENTITIES -- FILING FEES AND REPORTING REQUIREMENTS. (a) In General. A business that operates in Maryland can do so as a sole proprietorship, a general or limited partnership, a corporation, or a limited liability company. In addition, like the federal tax law, the state income tax law also recognizes S corporations for income tax purposes, and generally allows the income or losses of an S corporation to "flow through" and be taxed or deducted at the shareholder level, rather than taxing the corporation itself as an entity. Maryland also provides for limited liability partnerships, in which no partner is liable for certain debts of the partnership, somewhat like a corporation or LLC, but with fewer legal formalities than are required for either a corporation or an LLC. Each of the above entities is discussed below, along with the basic requirements for forming such an entity and any general ongoing (non-tax) reporting requirements that are applicable to it. The tax treatment of each form of legal entity is discussed in Section IV below. (b) Sole Proprietorships. In Maryland, you will need to register your business with the appropriate clerk of the circuit court in the county where the business is located. In general, sole proprietorships in Maryland can be established with no formalities. However, as discussed in Section IV(b), it will generally be necessary to obtain one or more local business licenses from cities or counties in which you operate and, in some cases, state licenses, as well. No separate tax form filing is required, generally, for a sole proprietorship, under the Maryland income tax law. Instead, as with the Schedule C on your federal Form 1040, you simply report the net income or loss from your sole proprietorship on your state personal income tax return. See Section IV(c) for information on the Maryland income tax and filing requirements for individuals. Operating as a sole proprietor in Maryland is generally much simpler than as any other kind of business legal entity. As a sole proprietor, if you have no employees, you are not required to pay any unemployment taxes, withhold any federal or state income tax from wages, or obtain workers' compensation coverage for yourself. However, if you will be making sales that are subject to sales tax, you will need to register with the Comptroller of Maryland and obtain a sales tax permit, as discussed in Section IV(d). (c) Partnerships. Maryland's partnership laws allow creation of either a general partnership, in which all partners are liable for the debts of the business, or a limited partnership, in which only the general partners are liable for debts, while the liability of limited partners is limited to the amount they have invested, in general. State law also allows for the creation of a limited liability partnership, in which no partner has personal liability (subject to certain exceptions) and for a limited liability limited partnership, which is a limited partnership that also elects limited liability partnership status. Partnerships, as entities, are not subject to state income tax in Maryland. Instead, the income or losses of the partnership, as allocated among the partners, must be reported on the personal income tax returns of the individual partners (or on the corporate tax returns of any corporate partners). Partnerships are required to file an annual tax information return, Form 510, with the state and partnerships that have nonresident partners may be required to withhold state income tax and make quarterly estimated tax payments on behalf of the nonresident partners. For more on Maryland partnership tax return filing requirements, see Section IV(c). A partnership agreement, for any type of partnership, should spell out in considerable detail such matters as the following:
As a rule, general partnerships in Maryland can be formed with no formalities, although it is highly advisable to have a written partnership agreement. However, as discussed in Section IV(b), it will generally be necessary to obtain one or more local business licenses from cities or counties in which you operate and, in some cases, state licenses, for any type of partnership, including general or limited partnerships, or limited liability partnerships. General partnerships must also file annual business personal property tax returns each year by April 15th, as discussed in Section IV(e). A general partnership may file a statement of partnership authority with the Corporate Charter Division of the State Department of Assessments and Taxation, designating which partners in the partnership have the authority to enter into specified types of transactions, such as real estate transactions. A limited partnership, in which there is at least one general partner (who is liable for partnership debts) and at least one limited partner (who is not liable for partnership debts), may also be formed under Maryland law. Unlike a general partnership, a limited partnership must generally have a written partnership agreement, and must file a certificate of limited partnership with the State Department of Assessments and Taxation (SDAT), together with a filing fee of $100. Foreign limited partnerships must also register before being allowed to do business in Maryland, and must pay a registration fee of $100. In addition, limited partnerships must file an annual personal property tax report and must also pay an annual report fee of $300. See Section IV(e) for details. As several other states have done, Maryland now allows a limited partnership to also become a limited liability partnership -- a limited liability limited partnership, or LLLP. An LLLP is a regular limited partnership that has elected LLP status, so that the general partners in the LLLP are given the same liability protection as partners in an LLP. For information on limited partnership filing and registration requirements (other than for income tax), see the contact information for the offices of the Maryland State Department of Assessments and Taxation, listed in Section VI(a). LIMITED LIABILITY PARTNERSHIPS Limited liability partnerships (LLP's) are a relatively new form of partnership permitted under the laws of Maryland. Like an LLC, an LLP provides limited liability for its owners, while retaining the tax advantages of a partnership for federal and Maryland state income tax purposes. However, unlike an LLC, an LLP typically operates like a regular partnership, and is not required to file articles of organization. A general partnership can achieve limited liability by simply registering the partnership with the state as an LLP. A limited partnership may also register as an LLP (becoming an LLLP), in order to provide liability protection to its general partners. To register your partnership as an LLP in Maryland, you must file a Certificate of Limited Liability Partnership with the SDAT and pay a filing fee of $100. Foreign LLP's, those created under the laws of another state, must also register with the SDAT and pay a registration fee of $100. Both foreign and domestic LLP's must file an annual personal property tax report with the SDAT by April 15th of each year and pay a $300 filing fee. This fee has been reduced to $100 for a family farm operating as an LLP. See Section IV(e) for details. For more information on LLP registration and reporting requirements, see the contact information for the offices of the State Department of Assessments and Taxation, listed in Section VI(a). Note that one potential drawback of LLP's, if you will do business in other states besides Maryland, is that you may not enjoy limited liability with regard to creditors of the LLP if you do business in some such states. Some states, like California and New York, only recognize certain types of professional partnerships as LLP's. Such other states may simply treat your LLP like an ordinary general partnership, with no limitation of liability. (d) Corporations. To form a corporation in Maryland, you must file articles of incorporation with the Corporate Charter Division of the Maryland Department of Assessments and Taxation (SDAT) and pay an organization fee based on the amount of the corporation's authorized capital stock, plus a $100 recording fee. The organization fee on the par value of capital stock is determined as follows:
(Stock that has no par value is treated as having a value of $20 per share.) A foreign corporation (one formed under the laws of another state or a foreign country), must obtain a certificate of authority before it may legally conduct business in Maryland, by filing an application for a certificate of authority and paying a filing fee of $100. For more information on filing articles of incorporation or applying for a certificate of authority to do business in Maryland, see the contact information for the offices of the SDAT, listed in Section VI(a). In addition, once your corporation is formed, it will be required to file annual reports (and a $300 filing fee) and personal property tax returns with the SDAT each year. The $300 fee is reduced to $100 for a family farm operating as a corporation. Failure to file annual reports on a timely basis could result in suspension or revocation of your corporation's charter. See Section IV(e) for personal property tax annual report filing requirements. In addition to paying federal income taxes on its income, a corporation that does business in Maryland must also file corporate income tax returns with the state. See Section IV(c) for a discussion of state corporate income tax rates and tax return filing requirements. For tax forms and more information on corporate income taxes in Maryland, see the contact information for the offices of the State Department of Assessments and Taxation, listed in Section VI(a). (e) S Corporations. An S corporation is simply a regular corporation that has elected, for federal or state income tax purposes, or for both, to be taxed somewhat like a partnership, with its income, losses and tax credits flowing through to its owners, who report such income, losses, or credits on their individual income tax returns. Maryland recognizes S corporations for income tax purposes, and treats them in a manner similar to the federal tax treatment, taxing their income to the shareholders rather than at the corporate level, generally. However, an S corporation that has any nonresident shareholders will be required to make quarterly estimated tax payments on behalf of the nonresidents, on their respective shares of the entity's Maryland-source taxable income. (f) Limited Liability Companies. Maryland, like every other state in the U.S., has adopted a limited liability company (LLC) law. Thus, in addition to the traditional choices of a sole proprietorship, partnership, or corporation, a business that operates in Maryland may also choose to operate in the form of an LLC. In most states, including Maryland, LLC's are very attractive entities for many small businesses, in that they offer the same protection as a corporation from creditors for debts of the business, while offering much of the flexibility plus the flow-through tax treatment of a partnership for federal and Maryland tax purposes. LLC's are generally not taxable in Maryland, but an LLC that has any nonresident members will be required to make quarterly estimated state income tax payments on behalf of the nonresident members, on their respective shares of the LLC's Maryland-source taxable income. See Section IV(c) for more on the income tax treatment of LLC's under Maryland tax laws. To form an LLC under the laws of Maryland, one or more persons must file articles of organization with the State Department of Assessments and Taxation (SDAT), which must be accompanied by a filing fee of $100. Maryland state law also allows formation of one-owner LLC's, which now qualify for treatment as sole proprietorships for federal and Maryland tax purposes. Foreign LLC's, those formed under the laws of another state, must obtain a certificate of authority to do business in Maryland, by filing an application for a certificate of authority with the SDAT and paying a filing fee of $100. Once an LLC has been formed in Maryland, or a foreign LLC has registered to do business, it will have to file a annual report and personal property tax return each year and pay a fee of $300 in addition to any personal property tax, as discussed in Section IV(e). This fee is reduced to $100 for a family farm operating as an LLC. For more information on filing articles of organization for an LLC, see the contact information for the offices of the State Department of Assessments and Taxation, listed in Section VI(a). (a) In General. When acquiring an existing business, there are a number of state legal and tax issues you or, preferably, your business attorney, should attend to before closing the purchase. These include matters such as doing a title search for any real property that is being acquired, checking for any recorded security interests on personal property items, and thoroughly researching county, state, and federal records for any judgment liens, tax liens, or other liens, before property is acquired. You will also benefit from consulting a tax advisor before the agreement of sale is negotiated, in order to seek a structuring of the agreement so that the purchase price is allocated among the assets in a way that favors you. You may be able to obtain considerable tax savings if the purchase price is allocated in a way that gives you the best possible tax results under federal and state income tax laws, and other state tax laws, such as sales/use tax or property tax laws. Depending upon the state (or states) in which the seller's assets are located, you may also have to comply with state bulk sale or bulk transfer laws. (Note: Virginia and the District of Columbia both have bulk sale laws.) You should also obtain tax releases from various state taxing agencies, as discussed below. (b) Bulk Sale Laws. Typical bulk sale laws require either publication of legal notices to all creditors in advance of the sale and recording of such notices in some cases, or maintenance of detailed lists of the property to be transferred, for inspection by the public. Since Maryland is one of the few states that still has a bulk sale law, you will need to comply with its provisions when you purchase the assets of an existing business. Failure to do so will expose you to liability to any creditors of the seller who do not get paid off when the sale of the business occurs. Maryland's bulk sale law closely follows the standard bulk transfer provisions of Article 6 of the Uniform Commercial Code. The basic requirements, when purchasing the assets of business in a bulk sale, are as follows:
Where a new business is organized to take over and continue an existing business, the above requirements do not apply, if the new business (the purchaser) gives public notice of the transaction, assumes the debts of the seller, and receives nothing from the transaction except an interest in the new enterprise that is junior to the claims of creditors. In such case, public notice consists of publishing a notice once a week for two weeks in a newspaper of general circulation where the seller had its principal place of business, giving the names and addresses of the buyer and seller and the date of the transfer. Compliance with the bulk sales law should be handled by a competent business attorney, as its requirements are quite specific and very technical in nature. (c) Tax Releases. When you acquire an existing business, you will want to make sure that you do not unwittingly become liable for any unpaid taxes owed by the seller. Typically, to protect yourself, you will need to receive a tax release or releases from various state taxing agencies, for such taxes as sales and use tax, income tax withholding, and state unemployment taxes, in each state in which the seller does business. If you fail to obtain such a release or written statement from the tax agency that the seller is not delinquent on any tax payments, you may be held responsible for such tax if it is not withheld from the purchase price proceeds and paid to the state at the time the sale of the business transpires. In Maryland, you should obtain tax releases for unemployment and sales and use taxes, when buying an existing business. The Maryland sales tax law also requires a buyer in a bulk sale transaction to notify the Comptroller of Maryland with regard to the bulk sale of assets, in the event that sales and use taxes may possibly be due from the seller. IMPORTANT NOTE: (d) Unemployment Tax Rating of Seller. In addition to obtaining tax releases, you may find it advantageous to succeed to the seller's unemployment tax experience rating, if the seller has a tax rate lower than you would otherwise obtain as a new business. To obtain the seller's favorable experience rating as a successor employer, you will need to apply on a timely basis (within 120 days of the transaction) to the Division of Unemployment Insurance, requesting that you be treated as a successor employer. IMPORTANT NOTE: Accordingly, if you business acquires most of the assets and payroll of an existing business, you should contact the Department of Labor, Licensing and Regulation and, if necessary, consult an attorney, with regard to whether your business may be able to succeed to the seller's experience rating and be treated as a "successor employer," if that is desirable. PLANNING POINT: EXAMPLE: (e) Withholding Tax on Real Estate Purchases. Maryland law, effective since October 1, 2003, requires that a buyer withhold state income tax equal to 6.25% or 8.25% of the sales proceeds actually paid to a nonresident seller of Maryland real property and any associated personal property. The 6.25% rate applies if the seller is a nonresident individual; the 8.25% rate applies if the seller is an entity, such as a corporation. Effective since July 1, 2005, the lowest Maryland county income tax rate (for individuals), currently 1.25%, must also be withheld, so that the total percentage to be withheld for a nonresident individual seller is now 7.5% in 2008 and later. Withholding is not required if the seller certifies that the property being sold is the seller's principal residence or if the seller provides an affidavit that certifies that the seller is a resident of Maryland. The buyer or the settlement officer must withhold the required amount of tax at settlement and remit the tax to either the local clerk of the circuit court or to the state on Form MW 506 NRS. IV. MARYLAND TAXES AND OTHER GENERAL REQUIREMENTS. (a) In General.
Tax rates in Maryland are neither particularly high or low,
compared to most other states. While the state personal income
tax was reduced to only 4.75% after 2001, the top rate was
increased to 6.25% in 2008 and the existence of local "piggy-back"
income taxes raises the total state and local income tax burden
to a maximum rate of 7.5% to nearly 11% in many counties, so
that combined rates in Maryland are actually higher than typical
state tax rates in many states that do not impose local income
taxes.
The state sales tax, at 6% (5% before January 3, 2008), is
somewhat lower than that of most other states, however, and
unlike most states, Maryland does not allow localities to impose
sales taxes, in general.
Maryland differs from many other states in that it does not
impose any kind of annual franchise tax on the capital of
corporations or other business entities, although there is
a one-time incorporation fee, based on authorized shares of
capital stock when a business incorporates in Maryland, as
discussed in Section II(d). Maryland also
levies a franchise tax based on gross receipts, but it applies
only to certain public service (utility) companies.
Maryland adopted income tax and sales tax withholding
requirements with regard to certain payments to nonresident
contractors for real property improvement contracts, effective
for contracts entered into on or after July 1, 2003. The
person or entity contracting with the nonresident contractor
was required to withhold 3% of the contract price until 30 days
after the contractor made a written request for a tax clearance
certificate with the Comptroller of Maryland.
The Comptroller was required to issue either a certificate
of no tax due or a certificate of tax due within 30 days of
the request by the contractor, which the party who has withheld
the tax must abide by, either by releasing the funds to the
contractor, or remitting any tax owed by the contractor to the
Comptroller of Maryland. The withholding requirement generally
applied to any real estate improvement general contract of
$500,000 or more, or any subcontract with a subcontractor for
$50,000 or more, where the total improvements were $500,000 or more.
In 2004, Maryland adopted legislation that requires
nonresident taxpayers, who are not subject to any Maryland
county income taxes, to pay tax at a rate that is equal to
the top state income tax rate plus the lowest tax rate imposed
by any county in Maryland. Previously, nonresident taxpayers
paid Maryland income tax at only the state tax rate, and escaped
the local "piggy-back" income taxes imposed by counties. The
new rule went into effect for tax years beginning on or after
January 1, 2004, increasing the withholding tax rate for
nonresident individuals from 4.75% to 6%, and the 2008 tax
rate increase upped the withholding rate for nonresidents
further, to 7.5%.
For state tax forms and tax information, see the contact
information for the Comptroller of Maryland in
Section VI(a).
(b) State and Local Licensing.
Nearly any business, operated anywhere in the United States, will
have to have at least one government license of some kind. In
most cases, this will be a local license, issued by your city or
county. Before you open your business, contact your local city
or county hall and find out if your particular business needs one
or more local licenses. Most kinds of local business licenses
are granted upon payment of a fee, with no further requirements,
except possibly for annual or other periodic renewal fees. In
Maryland, local business licenses can be obtained from the Clerk
of the Circuit Court in the county where your business is to be
located.
However, if you are engaging in any kind of food business,
you will usually need to also obtain a health department
permit and show that you are in compliance with health
department food-handling requirements. In addition, be
sure to check with an attorney or local government zoning
or planning department officials to determine if your
business will be in compliance with all local zoning
and planning restrictions. If you own or rent any type
of facility, you will generally need fire department
permits, showing that you meet fire safety codes and any
construction or improvements to an existing structure
will usually require a building permit. If you intend to
simply operate your business from your home, you may be
in violation of local zoning requirements, but this is
less likely to be a concern if you don't have clients,
customers, suppliers, or employees coming to your house
on business on a regular basis.
State governments have traditionally required special
licenses for many kinds of professionals, such as physicians,
dentists, lawyers, and accountants. To further protect
consumers, Maryland has expanded the list of occupations
that must be licensed by the state to include many other
occupations. Most state licenses not only require payment
of fees, but are only issued for a given profession or
occupation upon showing that you have completed certain
educational or experience requirements, or passed certain
tests, or some combination of the foregoing.
Most professional and occupational licenses in Maryland are
issued by subagencies or boards under the State Department
of Labor, Licensing, and Regulation, Division of Occupational
and Professional Licensing.
Many businesses will need to register with the Comptroller
of Maryland by filing a Combined Registration Application
form. This form will allows you to register for state sales
and use taxes, as an employer for wage withholding, and for an
unemployment insurance account, as well as for other specialized
taxes or licenses that may be required.
In addition, most businesses will need to obtain a license
from the local Clerk of Court. Unless you are a grower or manufacturer,
you may not offer for sale, sell, or otherwise dispose of any
goods within Maryland, without first obtaining a Trader's License
from the Clerk of the Circuit Court. Other licenses you may need to
obtain from the Clerk of the Circuit Court, for specific types of
businesses, would include licenses for the following:
For assistance with state licensing and business registration
requirements in Maryland, see the contact information for the
offices of the Department of Labor, Licensing, and Regulation,
listed in Section VI(a).
(c) Income and Franchise Taxes.
Maryland has both an individual income tax and a corporate
income tax, but has no separate franchise tax on corporations,
except for a franchise tax based on gross receipts that
applies to gas, electric, and telephone utility companies.
Maryland has a reciprocal agreement with the state
of Virginia that provides that Virginia residents who
work in Maryland are not subject to Maryland income tax
on their compensation, and vice versa in the case of
Maryland residents who work in Virginia. However, this
exemption applies only to compensation, such as salary
or wages, and does not apply to business income earned
in the other state.
TAXATION OF SOLE PROPRIETORS AND PARTNERSHIPS
The Maryland individual income tax was imposed at a maximum
tax rate of only 4.75% on all taxable income in excess of
$3,000, in 2007. However, in 2008, 3 new tax brackets were
added, at 5% on taxable income from $150,001 through $300,000,
5.25% on taxable income from $300,001 through $500,000, and
5.5% on taxable income in excess of $500,000. For taxable years
2008, 2009, and 2010, the tax rate is 5.5% on income between
$500,000 and $1 million and 6.25% on taxable income in excess
of $1 million.
Baltimore City and each of the 23 Maryland counties also
levy "piggy-back" local income taxes that currently range
from about 30% to 60% of the state tax paid by an individual
taxpayer. Such local taxes currently range from 2.6% to 3.2%
of taxable income in all counties and Baltimore City, except
for Worcester County, which has a 1.25% rate.
Individual taxpayers generally pay state income tax
on their business earnings from a sole proprietorship, or
on their share of the earnings of a pass-through entity,
such as a partnership, S corporation, or LLC. A Maryland
personal income tax return must be filed with the
Comptroller of Maryland each year by April 15th,
for the preceding calendar year.
Partnerships, or entities taxable as partnerships, such as
LLC's, are not subject to state income taxation in Maryland,
but must file an information return with the Comptroller
of Maryland each year, showing each partner's share of
taxable income, losses, and credits, on Form 510,
Pass-Through Entity Income Tax Return. This information
return is due by April 15th of the following year, in the
case of a calendar year partnership or LLC (or by March 15th,
in the case of an S corporation).
Pass-through entities (partnerships, LLC's, or S corporations)
that have nonresident owners must make estimated tax payments
on behalf of the nonresidents, at the rate of 6.25% of their
respective shares of the entity's Maryland-source taxable income,
generally, plus an additional special nonresident tax that is
equal to the lowest local income tax rate that is in effect in
Maryland for that taxable year (1.25% in 2009), or a total rate
of 7.5%.
The tax rate for withholding is 8.25% on income allocable to
nonresident entities (corporations, LLC's, etc., that are not
registered to do business in Maryland).
Quarterly estimated tax payments on behalf of the nonresidents
are due on Form 510D.
Individual taxpayers doing business as sole proprietors
(or who are partners in partnerships, members of LLC's, or
shareholders in S corporations), who have taxable income
from the business, will generally be required to make
advance payments of estimated Maryland individual income
taxes, if their net tax liability (not covered by withholding)
exceeds one-half of the federal minimum required for a
federal estimated tax declaration (one half of $1,000,
or $500 at present).
Estimated tax payments are due in four installments, on the
15th day of the 4th, 6th, and 9th months of the taxable year,
and the 15th day of the first month of the following year.
To avoid penalties for underpayment of estimated tax, you must
generally either pay in 90% of the current year's tax, or 110% of
the previous year's tax.
The Maryland corporate income tax rate, on corporations
other than S corporations, was 7% in 2007, and increased to
8.25%, for taxable years that began in 2008 or later. A state
corporation income tax return must be filed with the Comptroller
of Maryland by the 15th day of the third month following
the end of the taxable year, or by March 15th in the case
of a corporation whose taxable year is the calendar year.
Corporations are required to make estimated tax payments
of their state corporate income tax in advance, if their
tax liability for the year exceeds $1,000.
Corporate estimated tax payments are due in advance, in four
equal installments, on the 15th day of the 4th, 6th, 9th,
and 12th months of the taxable year. The total estimated tax
that must be paid in is usually equal to 90% of the actual
tax liability for the year. However, if the preceding year
was a full year of 12 months, the current year payments need
only be equal to 110% of the prior year's tax liability, if
less.
Penalties will be imposed for failure to make the required
estimated tax payments on a timely basis.
S corporations are not subject to tax, except to the extent
their income is taxable for federal purposes, in general. Like
partnerships or LLC's, an S corporation files Form 510,
Pass-Through Entity Income Tax Return, each year,
to report the income or loss that is to be reported by its
shareholders. For an S corporation, this information return
is due by March 15th of the following year, in the case of a
calendar year S corporation. Like partnerships or LLC's, an
S corporation that has one or more nonresident owners may
be required to withhold state income tax on the nonresidents'
share of the S corporation's Maryland-source taxable income
and to remit the tax in the form of quarterly estimated tax
payments, on Form 510D.
TAXATION OF LIMITED LIABILITY COMPANIES
In Maryland, a limited liability company (LLC) with
two or more members will be taxed in the same manner as a
partnership, thus avoiding the possible double taxation of
income that can occur with a corporation. Note that under
IRS regulations, effective since 1997, an LLC is now able
to elect to be treated as a partnership if it has more than
one owner, or as a sole proprietorship if it does not,
for federal tax purposes. Maryland law now recognizes the
validity of a one-owner LLC and the state announced in
1997 that it will follow the tax treatment an LLC elects
for federal tax purposes on IRS Form 8832.
Note that it is not always entirely clear whether an LLC is
a "single-member LLC" or not, where the "single owner" is a
married couple who hold the entire ownership of the LLC in some
form of co-tenancy, such as joint tenants with right of survivorship,
tenants by the entirety, or as tenants in common. The federal Internal
Revenue Service (IRS) has taken a very lenient position in Rev.
Proc. 2002-69, where a couple hold the LLC interest as
community property, ruling that the IRS will accept whatever choice
the couple make, either to disregard the LLC as an entity (treating
it as a "single-member LLC") or to treat it as a partnership between
the husband and wife.
However, Maryland is not a community property state, so where
the LLC is owned by a husband and wife in some form of co-tenancy,
it is unclear whether the IRS treatment would be as lenient as
for community property owners, since the IRS has not issued any
published rulings on whether an LLC can be a disregarded entity
if held in one of the various forms of co-tenancy by a married
couple, rather than being held as community property. Thus, it
is also unclear, where an LLC is owned by a husband and wife as
co-tenants, whether Maryland would treat the LLC as a single-member
LLC or as a partnership.
Like a partnership, an LLC in Maryland files Form 510,
Pass-Through Entity Income Tax Return. This information
return is due by April 15th of the following year, in the case
of a calendar year LLC. While an LLC that has not elected to be
taxed as a corporation is not subject to Maryland income taxes,
an LLC that has any nonresident members will be required to make
quarterly estimated state income tax payments on behalf of the
nonresident members, at the rates that are described in the
discussion of partnership taxation in
Maryland. A single-member LLC is disregarded, and thus is not
subject to the pass-through entity tax rules, since its entire
income is taxable to its owner.
(d) Sales and Use Tax.
Maryland imposes a general sales tax on retail sales of
tangible personal property and certain types of services
at the statewide rate of 5% (6%, beginning January 3, 2008).
Special rates of 8% for truck rentals and 11.5% for
passenger auto rentals are imposed, applicable only to
short-term rentals of 180 days or less.
Sellers are required to obtain a seller's permit
and to collect and pay over the sales and use taxes to
the Comptroller of Maryland.
No local sales or use taxes are imposed, generally,
although some narrow sales taxes are permitted, such
as on food and beverages in resort areas. Note, however,
that firms that are required to obtain a state sales tax
permit will, in most cases, also be required to obtain a
Trader's License from the local clerk of the circuit court
for the county (or Baltimore City).
For the period from January 3, 2008 through the sunset
date of June 30, 2013, certain computer-related services
were to be subject to sales tax, such as computer facilities
management, system planning and design, custom programming,
data processing, storage, and recovery, and hardware or
software installation, maintenance or repair. However,
Senate Bill 46 in 2008 repealed the tax on computer
services that was enacted in 2007 and also restored the
previous sales and use tax exemptions for sales of custom computer
software services and optional computer software maintenance
contracts, effective July 1, 2008 for tax years beginning after
December 31, 2007.
While the sales tax is imposed on the consumer and
state law had formerly prohibited the vendor from
absorbing the tax, the law has been changed, effective
January 3, 2008, so that now a vendor may absorb some
or all of the tax. Previously, a retailer could not
advertise that it was selling items "free of sales tax"
or that it would refund the sales tax to the consumer.
However, a vendor must continue to separately state
the tax from the sales price at the time of sale to
the purchaser.
There are numerous exemptions from the sales tax, the
most important of which is the resale exemption. If you
are a wholesaler or retailer who purchases goods that you
will resell, your purchase of such goods may qualify as an
exempt sale for resale. Similarly, if you sell goods to
wholesalers or retailers for resale by them, your sale may
also qualify as an exempt sale for resale. In any such
transaction, the exemption is ordinarily available only if
the purchaser gives the seller a valid resale certificate,
certifying that the items are being purchased for resale,
and not for use or consumption by the buyer.
A shadow tax, the use tax, is also imposed at the same
rate as the sales tax. It is primarily intended to tax any
property that is acquired from sources outside of the state,
in transactions not subject to sales tax, when such property
is used or consumed within Maryland. Use tax may also apply
to items purchased on an exempt basis, such as for resale,
if such items end up being used or consumed, instead of
being resold.
Vendors who collect sales tax are allowed to keep part of
the tax, as a "collection credit" to compensate them for their
costs of complying with the sales and use tax law. The amount
of the credit is 1.2% of the first $6,000 of tax required to be
paid with each return, and 0.9% of any excess over $6,000 of
tax. For the period of July 1, 2004 through June 30, 2006,
the "collection credit" was reduced by one half. From January
3, 2008 through June 30, 2011, the maximum credit allowed on
any return is limited to $500, under 2007 legislation.
Effective since July 1, 2005, the discount previously
allowed on untaxed purchases used in Maryland has been
eliminated.
Before making any taxable sales, you will need to
register with the Comptroller of Maryland, filing a
Combined Registration Application form.
This form can also be used to register for other state
taxes, as an employer, and for an unemployment insurance
account.
For more information on Maryland sales and use tax
registration and compliance, see contact information for
the offices of the Comptroller of Maryland in
Section VI(a).
(e) Real and Personal Property Taxes.
In Maryland, as in every other state, any business real estate
you own will be subject to real property taxes. In general,
there is little that you must do, unless you wish to challenge
your assessed valuation, since the assessor will bill you for
each year's property taxes as they come due. Unlike most other
states, in Maryland the valuation of all real and personal
property for purposes of property taxation is a function of the
State government. The Director of Assessments and Taxation,
appointed by the Governor, administers and enforces the property
assessment and property tax laws of Maryland. This organizational
structure allows for uniformity of property assessment throughout
the State.
Maryland counties and the City of Baltimore also impose
personal property taxes on tangible personal property. ("Personal
property" is any kind of property that is not real estate.)
However, certain kinds of business personal property, such
as business inventories, are exempt from personal property
tax in most Maryland counties and some cities.
While Maryland generally taxes tangible personal property,
it does not impose a property tax on intangible personal
property, such as stocks, bonds, promissory notes, and
other such paper assets.
In addition, Maryland exempts personal property used in
a home-based business from all property taxation, if the
business is a sole proprietorship and the original value
of the property (excluding motor vehicles) did not exceed
$10,000. However, one initial personal property tax return
must be filed to claim this exemption.
Every corporation, LLC, LLP, or limited partnership doing
business in Maryland, including both domestic and foreign firms,
must file an annual personal property report (Form 1)
with the Department of Assessments and Taxation, by April 15th of
each year, in addition to paying a $300 annual report fee (reduced
to $100 for a "family farm" business entity). General partnerships
and sole proprietorships file a personal property tax report on
Form AT3-51, but do not have to pay the $300
additional annual report fee. Businesses that need a Trader's
License must report their commercial inventories on whichever
of the above forms they file.
See Section VI(a) for address and
other contact information for the Department of Assessments and
Taxation.
(f) Other Business Taxes.
Maryland imposes a number of excise and other taxes on businesses,
some of which may affect you. These include:
Maryland also has county document recordation taxes and
a state real property transfer tax of 0.5% that applies to most
conveyances of title or leasehold interests in real estate.
Transferring title to real estate from a general partnership
to an LLC with the same ownership interests as the partnership
is not subject to recordation and transfer taxes.
Note that after June 30, 2008, where more than an 80%
controlling interest in a corporation, partnership, LLC,
or trust is transferred, the recordation tax will apply
to any real estate owned by the entity if real estate
constitutes at least 80% of the value of all the assets
owned by the entity and has an aggregate value of at
least $1 million.
(g) Trade Names.
A trade name, also known as a fictitious or assumed name, is
any name used in the course of business that does not include
the actual legal names of all the owners of the business. Thus,
if your business goes by any name other than your own real
name, it is operating under a trade name. The same is true
of a corporation, if it operates under a name other than its
legal name. A trade name might also be one that suggests the
existence of additional owners, by using such words as
"company," "associates," or "group."
In most states where you do business, it will be necessary
to register a trade, fictitious, or assumed name, so that
people who do business with you can find out who the actual
owners of your business are. You may also want to register
any such trade name, as a means of protecting against other
companies usurping that particular trade name.
In Maryland, you must register your trade name, if any,
with the State Department of Assessments and Taxation, Trade
Name Search and Registration. The registration fee, which
covers a five-year registration period, is $25.
See Section VI(a) for contact
information for the Department of Assessments and Taxation,
Trade Name Search and Registration.
V. EMPLOYER REQUIREMENTS IF YOU HAVE EMPLOYEES (a) Employer Registration and Withholding. If you have any employees, you will already be withholding federal income tax and FICA taxes from their wages. Since Maryland imposes a state income tax on the income of individuals, you will need to also withhold Maryland income tax from the wages of your employees. Before you begin to pay wages, you must register as an employer with the Comptroller of Maryland by completing a Combined Registration Application. This form can also be used to register for unemployment insurance and for various state taxes, including sales and use tax. Note that, since 2005, quarterly income tax withholding returns are due on the 15th day of the month following the end of each calendar quarter, rather than on the last day of the month. For more information on Maryland income tax withholding and registration requirements for employers, see the contact information for the offices of the Comptroller of Maryland, listed in Section VI(a). (b) Unemployment and Other State Payroll Taxes. If your business has one or more employees, you, as an employer, will be required to pay state unemployment tax based on the amount of such wages paid. Employers subject to the Maryland unemployment tax are required to register with the Division of Unemployment Insurance on a Combined Registration Application form, which can also be used to register for state income tax withholding, sales tax, and other Maryland taxes with the Comptroller of Maryland. New employers are required to pay unemployment tax in 2009 on the first $8,500 of wages paid to each employee, at rates that vary by industry. The rates are set each year for both construction and non-construction employers. For non-construction employers, the new employer rate can vary from year to year from as low as 1% to as high as 2.6%. For 2009, the general new employer tax rate is 2.2% and the rate for new construction industry employers is 4.5%. After you have had employees for a while, you will develop an unemployment tax experience rating. This rating is based on the number of employees you terminate who then claim unemployment benefits and the amount of such benefits paid to those former employees, under complex formulas. The state will inform you when they have assigned you an individual tax rate based on your firm's experience rating. That rate may be higher or, if you have had relatively few benefit claims charged to your account, lower than the standard new employer tax rate you initially were paying. All state unemployment taxes are imposed upon you as the employer, and, under Maryland law, cannot be charged to your employees or withheld from their wages. Employers subject to the unemployment tax are required to display an unemployment compensation poster in the workplace, plus a health insurance poster, if providing health insurance to employees. Both posters can be obtained from the Division of Unemployment Insurance. For more information on your Maryland unemployment tax obligations as an employer, see the contact information for the Division of Unemployment Insurance of the Department of Labor, Licensing and Regulation, listed in Section VI(a). (c) Workers' Compensation. Workers' compensation insurance is a state-mandated insurance requirement for most employers, in almost every state. In Maryland, virtually all businesses with one or more employees are required by law to have workers' compensation insurance, except those able to self-insure. Note, however, that a sole proprietor or a partner in a partnership is generally not considered an employee, although either may elect to be covered by workers' compensation insurance if they devote full time to the business. Real estate salespersons or associate brokers are not considered employees under the workers' compensation law if the qualify as independent contractors for federal tax purposes. An employee who is an officer of a corporation or a person who is a member of an LLC is generally required to be covered for workers' compensation purposes if he or she provides a service for the business for monetary compensation. However, such persons may elect out of coverage in the case of officers in certain "close corporations," officers who are 20% or greater stockholders in certain farm corporations and professional corporations, or members of an LLC who own a 20% or greater interest in the LLC. Workers' compensation provides wage loss and medical benefits to employees injured on the job and it protects you, as an employer, from legal action for damages for injuries or job-related illnesses suffered by your employees. In effect, it is a "no-fault" insurance system for work-related injuries or illnesses. Thus, if you fail to obtain required workers' compensation insurance, and an employee is injured on the job, you will have opened yourself to unlimited liability and severe legal consequences, so it is very important to obtain workers' compensation insurance for your employees. You can also incur serious fines for doing business without required workers' compensation insurance. Employers in Maryland may obtain workers' compensation coverage either from private insurers or from the Injured Workers Compensation Fund. Be aware that neither general liability nor health and accident insurance can properly substitute for workers' compensation insurance. As an employer, you must notify injured employees of their benefits and post a notice in the workplace informing your employees of their workers' compensation coverage. For more detailed information regarding your obligations as an employer under the Maryland workers' compensation laws, contact your insurance carrier or see the contact information for the offices of the Maryland Workers' Compensation Commission, listed in Section VI(a). (d) State Wage and Hour Laws. Some employees of certain small firms not engaged in interstate commerce are not covered by the federal minimum wage and overtime laws. However, even if few or none of your employees are covered by the federal wage-hour laws, if, for example, because your firm does less than $500,000 a year in gross sales and the employees in question are not deemed to "...engage in (interstate) commerce...," they will still generally be subject to the Maryland wage-hour laws. The Maryland law provides for a state minimum hourly wage that currently is the greater of $6.15 an hour, since February 15, 2006, or the same as the federal minimum wage, if higher. On July 24, 2008, the federal minimum wage increased to $6.55 an hour, so that is now the Maryland minimum wage. It will increase again, along with the federal minimum wage, to $7.25 an hour on July 24, 2009. Note that, as under federal wage-hour laws, certain classes of executive, administrative, and professional employees are exempted from the Maryland wage-hour rules, as are outside salespersons and employees paid on a commission basis. Otherwise, the Maryland minimum wage law applies to virtually all employees of all private sector employers in Maryland. Like federal law, Maryland law requires you to pay time-and-a-half to employees for overtime hours worked, in excess of 40 hours a week. However, numerous categories of employees, ranging from hotel, motel, restaurant, and gasoline station workers to taxicab drivers, are exempted from the Maryland overtime pay requirements. In addition, overtime pay only begins after 48 hours a week for workers in bowling alleys and residential care institutions that are not hospitals, or after 60 hours for farm workers. Besides the federal wage-hour posters that you must display in the workplace, you must also display a state wage-hour poster, which you can obtain from the Division of Labor and Industry of the Maryland Department of Labor, Licensing and Regulation. In addition to wage-hour laws, most businesses are subject to federal child labor laws, which put numerous restrictions on the working hours and kinds of work in which minors under the age of 18 may engage. Your business must also be cognizant of similar state child labor laws, in Maryland. Under Maryland's child labor laws, you are generally prohibited from hiring children under age 14, except for models and performers (with a special permit), and you may hire children ages 14 to 17 only if they obtain a work permit (obtained from the local school superintendent). Children may only work specified limited hours and only during certain times of the day. For example, a child worker must not have more than 12 hours of combined school hours and work in a single day, must be allowed at least 8 consecutive hours of non-school, non-work time in each day, and may not be required to work more than 5 hours without a break of at least one-half an hour. Children under the age of 16 are subject to other additional restrictions that do not apply to 16 or 17-year-olds. They may not work before 7 a.m. or after 8 p.m. (after 9 p.m. from Memorial Day through Labor Day). They also may not more than 4 hours a day during school session, or 8 hours when school is not in session; nor more than 23 hours in a week when school is in session for 5 days or 40 hours when school is not in session. Employers who employ any minors under the age of 18 in any location must display a child labor poster in each such workplace. For posters and other information on Maryland's child labor laws, contact the Division of Labor and Industry, part of the Department of Labor, Licensing and Regulation, at the address listed for that agency in Section VI(a). (e) State Occupational Safety and Health Laws. Approximately half of the states have their own OSHA-like agency, charged with administering the state's own occupational safety and health laws. The remaining states have no such enforcement agency, and thus rely instead on the federal Occupational Safety and Health Administration (OSHA) to administer the federal job safety rules within such states. Maryland is one of the states that has its own OSHA-type agency. To determine if your workplace is in compliance with federal and Maryland job safety requirements, you may wish to contact the Consultation Services Unit of the Division of Labor and Industry -- Maryland Occupational Safety and Health (MOSH), and request a free on-site safety consultation. You will not be cited for any violations detected, provided that you promptly correct the unsafe conditions. This differs from the rules for consultations by federal OSHA inspectors, who are required to cite you for any violations they find. Employers are required to post a MOSH poster on job safety in the workplace. For information on your job safety and health obligations as an employer, required posters, and possible on-site safety consultations, see the contact information for the Baltimore offices of Maryland Occupational Safety and Health (part of the Department of Labor, Licensing and Regulation, Division of Labor & Industry), listed in Section VI(a). (f) Other Miscellaneous State Labor Laws. Other Maryland labor laws you need to be aware of, as an employer, include the following: (1) Wage payments to terminated employees. State law requires employers to have regular paydays, which must be no less frequent than every two weeks or twice a month, except for certain executive or administrative employees. If a payday falls on a non-workday, employers must pay wages on the preceding workday. If an employee terminates employment, voluntarily or otherwise, any final wages owed must be paid to him or her no later than the next regular payday. (2) Right-to-work laws. About half the states have enacted "right-to-work" laws, which guarantee that no person may be denied employment for refusing to join a union or for not paying union dues, thus banning either "union shop" or "agency shop" agreements, or both. In a union shop, an employee not belonging to a union may be hired but then must join the union, usually within 30 days. In an agency shop, an employee need not join the union but, to remain employed, must pay union dues. Maryland does not have such a right-to-work law and allows union shop or agency shop contracts between an employer and a union. (3) State anti-discrimination laws. In addition to compliance with federal anti-discrimination laws, employers must also be aware of and comply with various state civil rights laws in Maryland, and must display a poster that informs employees of their rights. You can obtain this poster from the Maryland Human Relations Commission office, at the address listed in Section VI(a) for that agency. Maryland law, in general, prohibits discrimination in employment, by all employers who employ 15 or more employees during any 20 weeks of the year. Discrimination is illegal, if based on any of the following:
(4) Reporting new hires. Under federal welfare reform laws, employers in all states are now required to report newly-hired (or rehired) employees to a designated state agency (the Maryland New Hire Registry, for Maryland employers) within 20 days after the date of hire. If filing electronically or magnetically, reports must be filed twice a month (if needed), on dates not more than 16 days apart. Reports can consist of either the federal Form W-4 for each newly hired employee, or a form created by the employer that provides all the required information. See the contact information for where to mail or fax new hire reports in Section VI(a). (5) Workforce reductions. Maryland has a law, somewhat similar to the federal "W.A.R.N." Act, that requires an employer with 50 or more employees in the state to give advance notification (generally 90 days) before making a significant workforce reduction that reduces the number of employees at any workplace in Maryland by the greater of 15 employees or 25% of the total number of employees at such workplace, over a 3-month period. (6) Mandatory Employer HealthCare Spending. Overriding a veto by the governor, the Maryland Legislature enacted a new law in January, 2006 that requires certain employers to contribute to the state's Medicaid fund. The law only applies to employers with over 10,000 employees in the state who pay less than 8% of their total payroll for employee health care. Such employers must pay the difference between 8% of payroll and the amount they actually incur as employee health care expenses over to to the state Medicaid program, as a special tax. However, this legislation was carefully designed to apply to and punish only one company, Wal-Mart, and thus is not a concern for small businesses, unless the Legislature decides at some point to lower the 10,000 employee threshold to a much smaller number, which some political and labor leaders have urged. In July, 2006, a federal district court held that the "Wal-Mart law" is invalid under federal law, but the state is appealing the decision to the federal Court of Appeals. Stay tuned. (7) Lie Detector Tests Prohibited. Under Maryland law, an employer may not require or demand, as a condition of employment, prospective employment, or continued employment, that an individual submit to or take a lie detector or similar test. Unlike the federal law, which exempts certain kinds of firms from the prohibition against polygraph testing, the Maryland law makes no exceptions for any private businesses. In addition, any employment application form used in Maryland must have attached the following notice to the applicant, in bold-face upper-case type: "UNDER MARYLAND LAW, AN EMPLOYER MAY NOT REQUIRE OR DEMAND, AS A CONDITION OF EMPLOYMENT, PROSPECTIVE EMPLOYMENT, OR CONTINUED EMPLOYMENT, THAT AN INDIVIDUAL SUBMIT TO OR TAKE A LIE DETECTOR OR SIMILAR TEST. AN EMPLOYER WHO VIOLATES THIS LAW IS GUILTY OF A MISDEMEANOR AND SUBJECT TO A FINE NOT EXCEEDING $100."
The employment application must include a place for the applicant to sign, acknowledging that he or she has been given the above notice. VI. STATE SOURCES OF HELP AND INFORMATION (a) Key State Agencies Contact Information. Maryland, as many states have done in recent years, has established a "one-stop" center to help your new or existing businesses to obtain necessary state licenses and permits, the Maryland Business License Information System, part of the Department of Business and Economic Development. Contact this helpful agency on the Web at the Internet address (URL) listed in Section VI(c), or contact the Governor's Office of Business Advocacy and Small Business Assistance, at: Governor's Office of Advocacy and Small Business Assistance Also, You can register your business with the state for Maryland income tax, sales and use tax, employer withholding, state unemployment tax, and other state taxes, on a single state application form, the Combined Registration Application. To obtain business registration forms and information on starting or relocating your business in Maryland, contact: Comptroller of Maryland Addresses and other contact information for other key state and federal government agencies in Maryland, mentioned in preceding sections of this book, are listed below for your convenience. CORPORATION CHARTERS. Unlike most states, Maryland's secretary of state's office is not involved in receiving incorporation papers and other corporate and LLC filings. Instead, contact the State Department of Assessments and Taxation, Corporate Charter Division, for information on:
State Department of Assessments and Taxation TAXES. Obtain state income, sales and use tax, and other miscellaneous business tax forms, instructions and information from the Comptroller of Maryland, which is the main tax collection agency in Maryland. Also register with this agency as an employer, for state income tax withholding purposes, on the Combined Registration Application, which is also your registration for sales and use tax and as an employer under the unemployment insurance law of Maryland. Mail the completed registration form or tax forms to: Comptroller of Maryland STATE LABOR LAWS. Contact the following agency about your obligations as an employer under various state labor laws, including:
Department of Labor, Licensing and Regulation STATE LICENSES. The following agency is the main Maryland licensing agency. Contact this state agency for information about various types of professional and occupational licenses, which are administered by its various boards and licensing divisions. Department of Labor, Licensing, and Regulation STATE SALES TAX. Obtain your sales and use tax license or permit and information on the Maryland sales and use tax law, from the Comptroller of Maryland, at the address listed above for that agency. File a Combined Registration Application to register for sales tax. PROPERTY TAXES. All legal entities, such as corporations, LLC's, LLP's, and limited partnerships, which are required to register with the Department of Assessment and Taxation, will also register at the same time for state personal property tax. Other forms of business (general partnerships or sole proprietorships) are required to register with the Department of Assessment and Taxation for a tax identification number. Contact: Department of Assessments and Taxation STATE UNEMPLOYMENT TAX. Contact the following state agency to determine whether you are an employer subject to payment of state unemployment taxes, and for registration as an employer if you are subject: Department of Labor, Licensing and Regulation NEW HIRE REPORTING. Maryland employers are required to report all newly hired employees within 20 days to: The Maryland New Hire Registry WORKERS' COMPENSATION INSURANCE. If you employ workers for whom you must supply workers' compensation coverage, contact the following agency for further information and to obtain the required state workers' compensation notice you must post in the workplace: Workers' Compensation Commission STATE OSHA PROGRAM. For information on both federal and state occupational safety and health laws that affect you as an employer in Maryland, contact: Department of Labor, Licensing and Regulation TRADE NAME REGISTRATION. For information on trade name availability and registration forms contact: State Department of Assessments and Taxation STATE ANTI-DISCRIMINATION LAWS. Contact the following state commission for more detailed information on Maryland civil rights laws that may apply to your business and to obtain the state anti-discrimination poster you are required to post in the workplace: Maryland Human Relations Commission (b) Small Business Development Centers. A number of Small Business Development Centers (SBDCs) are located throughout Maryland to assist you. These centers, usually located on college campuses, provide a wealth of start-up information and sponsor frequent business-oriented seminars. Contact the lead office below for information, or for the location of other SBDCs nearer to you. Maryland Small Business Development Center (c) Internet Sites. For anyone with access to the Internet, there is a wealth of state and even local business information provided by state and local governments. All states now have a state government Web page, and most major Maryland state agencies also have sites on the Internet where you can obtain useful small business information on matters such as state taxes, financing sources, or the addresses and phone numbers (or e-mail addresses) of various state and federal agencies' offices in Maryland. Since new sites are appearing frequently, you might also want to search for other Maryland government Web sites by using one of the popular Internet search engines, such as Google, MSN, or Yahoo. To start your Internet search for Maryland government information, you may want to begin with the following Internet sites: State of Maryland home page: State Department of Assessments and Taxation, Corporate Charter Division: Business Licensing Information Center: Maryland Department of Business and Economic Development: Comptroller of Maryland (tax forms and assistance): Department of Labor, Licensing and Regulation: Maryland New Hire Registry (for reporting newly hired employees): (d) Financing Sources. For information and help on locating financing for your small business, contact the U.S. Small Business Administration office in Baltimore or Washington, D.C., or contact the Maryland Department of Business and Economic Development (at the Web address listed in Section VI(c) for that agency) for information on a wide range of state financial assistance programs for small businesses. The address of the SBA Office that serves most Maryland counties is: U.S. Small Business Administration The Baltimore SBA office does not serve Montgomery or Prince Georges Counties. If you are located in one of those counties, contact the Washington, D.C. Metropolitan Area District Office of the SBA, at: U.S. Small Business Administration |
Copyright © 2009 Michael D. Jenkins
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