Maryland Maryland Income Tax Form Instructions for Pass-Through Entities

Maryland Income Tax Form Instructions for Pass-Through Entities
2023 Pass-Through Entity Booklet
MARYLAND

2023

FORM 510 - PASS-THROUGH ENTITY INCOME TAX RETURN INSTRUCTIONS
For filing calendar year or any other tax year or period beginning in 2023

Brooke E. Lierman, Comptroller

Maryland Pass-Through Entity Taxpayers

•	 Community Investment Tax Credit**

This booklet contains the instructions necessary for a passthrough entity (PTE) to file a 2023 Maryland tax return. Read the
instructions carefully.

•	 Commuter Tax Credit**
•	 Cybersecurity Incentive Tax Credits**

Use blue or black ink when completing your forms and checks.

•	 Electing Pass-Through Entity Member Credit

To avoid delays in the processing of your return: do not
use pencil or ink in any other color; do not print returns
on colored paper; do not write on, staple or punch holes
in the barcode.

•	 Employer-Provided Long-Term Care Insurance Tax Credit
•	 Endow Maryland Tax Credit**
•	 Endowments of Maryland Historically Black Colleges and
Universities Tax Credit**

Form 510 and its related forms are to be used by partnerships,
S corporations, limited liability companies and business trusts.

•	 Energy Storage Systems Tax Credit**
•	 Enterprise Zone Tax Credit**

A business trust shall be classified as a corporation, a partnership,
a trust or otherwise, as determined under the United States
Internal Revenue Code.

•	 Film Production Activity Tax Credit**
•	 Federal Employer Security Clearance Costs Tax Credit**

New for 2023

•	 Heritage Structure Rehabilitation Tax Credit from Form
502S

Election to Pay Tax on All Members' Shares at
the Entity Level or to Pay Mandatory Tax Only on
Behalf of Nonresident Members: An entity may file
Form 510 as its year-end return only if it did not elect to pay
tax at the entity level with respect to all members' shares on its
first filing of the tax year (Form 510/511D or Form 510/511E).
An entity that made such an election must file Form 511 as
its year-end return. If the year-end return is the entity's first
filing of the tax year, filing Form 510 will be deemed to be an
irrevocable decision to pay tax only on behalf of nonresident
members. The entity will not be permitted to file an amended
return using Form 511.

•	 Job Creation Tax Credit**
•	 Maryland Disability Employment Tax Credit**
•	 More Jobs for Marylanders Tax Credit**
•	 One Maryland Economic Development Tax Credit**
•	 Preservation and Conservation Easements Tax Credit**
•	 Qualified Farms Tax Credit**
•	 Research and Development Tax Credits**

Changes to Form 510: Several changes have been made to
Form 510.

•	 Small Business Relief Tax Credit**
•	 Theatrical Production Tax Credit**

New language has been added to Line 16d to clarify instructions
for a nonresident PTE that is claiming a credit for tax paid by
another PTE of which it is a member. New Line 16e has been
added for a resident PTE to claim a credit for tax paid by
another PTE of which it is a member. The total payments and
credits will now be reported on new Line 16f.

•	 Work Opportunity Tax Credit
**Required Certification must be included with Form
500CR
REMINDER
•	 The Maryland Form 510
A Pass-Through Entity Income Tax Return must be filed
electronically if the pass-through entity has generated a
business tax credit from Form 500CR or a Heritage Structure
Rehabilitation Tax Credit from Form 502S to pass on to its
members.

Due to the decision by the Supreme Court of Maryland in
Comptroller of Maryland v. FC-GEN Operations Investments LLC,
the Comptroller will issue refunds at the entity level for PTEs
that report overpayments on Form 510. Accordingly, new lines
have been added to allow a PTE to calculate the refund it may
claim.
Credit for overpayments will no longer be passed through to a
PTE's members. Accordingly, Line 3, Part D on Schedule K-1
(510/511) has been removed.

Forms and help
For online business registration, tax forms, instructions,
publications, and Maryland Tax Regulations, visit
marylandtaxes.gov

Legislative Updates: The General Assembly enacted laws
establishing one new credit and making changes to existing
income tax modifications and credits. See the Maryland Income
Tax Form Instructions for Corporations and Form 500CR for
additional information.

E-mail your tax questions to
[email protected].
For assistance, call: 410-260-7980 in Central Maryland or
1-800-MDTAXES (638-2937) from elsewhere

Form 500CR
Maryland Form 500CR is used to claim the following business tax
credits against corporation and individual income tax.

Filing electronically

Electronic Format In accordance with SB 36 of the Acts of 2017
of the Maryland General Assembly, the Comptroller of Maryland
may grant a taxpayer a waiver of the requirement to file for certain
tax credit(s) by electronic means. Form 500CRW, Request for
a Waiver, must be submitted with the Form 500CR that
establishes a reasonable cause for not filing by electronic means
or that there is no feasible means of filing electronically creating
an undue hardship.
•	 Apprentice Employee Tax Credit**

The State of Maryland participates in the Federal/State
Modernized e-File program to file Maryland Corporation and
Pass-Through Entity returns electronically. For the list of
Software Vendors approved for e-filing Maryland returns or
for additional program information, visit marylandtaxes.gov.
You may also contact our e-File Helpdesk by emailing efil@
marylandtaxes.gov or calling 410-260-7753.

•	 Automated External Defibrillator For Restaurants Tax
Credit
•	 Biotechnology Investment Incentive Tax Credit**
•	 Businesses That Create New Jobs Tax Credit
•	 Catalytic Revitalization Projects and Historic Revitalization
Tax Credit**

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GENERAL INSTRUCTIONS
FILING FORM 510
The Maryland Form 510 must be filed electronically if the passthrough entity has generated a business tax credit from Form
500CR or a Heritage Structure Rehabilitation Tax Credit from
Form 502S to pass on to its members.

4

GENERAL INFORMATION FOR FORM 510

Accounting Periods   The tax year or period used for the
federal return must be used for the Maryland return. Accordingly,
calendar tax years, fiscal tax years, and short tax periods may
be necessary for Maryland filing purposes.
If a federal return is filed or required, a corresponding Maryland
return must be filed. The form used for filing must reflect the
preprinted tax year in which the PTE’s tax year begins.
Use of Federal Figures   In preparing Form 510, all items that
are reported for federal purposes must be reported on the
Maryland return in the same manner. The character of an item
cannot be changed from that required or elected for federal
purposes.

A LLC is treated as a partnership for Maryland income tax
purposes, unless it is treated as a corporation at the federal
level.
A business trust shall be classified as a corporation, a
partnership, a trust or otherwise, as shall be determined at the
federal level.

Taxability  Form 510 generally is an infor­mation return. The
items of income or loss of the PTE are passed through to the
members and subject to tax on the members’ Maryland income
tax return.

Unincorporated pass-through entities should follow the rules
for partnerships throughout these instructions. Incorporated
pass-through entities should follow the rules for S corporations.

If there are nonresident members, the pass-through entity
nonresident tax applies and must be paid by the PTE on behalf
of these members.

The term member is used in these instructions to include
partners of partnerships, shareholders of S corporations,
members of LLCs, and beneficiaries of business trusts.

PTEs must pay a tax consisting of 5.75%, in addition to a special
nonresident tax of 2.25%, of the nonresident individual and
nonresident fiduciary members’ distributive or pro rata shares
of income allocable to Maryland.

WHO MUST FILE?

Entities Required to File

PTEs also are required to pay a tax at the rate of 8.25% of
income allocable to Maryland on behalf of all members who are
nonresident entities. A nonresident entity is an entity that is
not formed under the laws of Maryland; and is not qualified by,
or registered with, the Department of Assessments and Taxation
to do business in Maryland. See Administrative Release 6.

Every Maryland PTE must file a return, even if it has no income
or the entity is inactive.
An entity may file Form 510 as its year-end return only if
it did not elect to pay tax at the entity level with respect
to all members' shares on its first filing of the tax year
(Form 510/511D or Form 510/511E). An entity that made such
an election must file Form 511 as its year-end return. If the
year-end return is the entity's first filing of the tax year, filing
Form 510 will be deemed to be an irrevocable decision to pay
tax only on behalf of nonresident members.

The PTE nonresident tax does not apply to a member that is a
Real Estate Investment Trust (REIT) or to a member that is
tax-exempt under IRC Sections 408(e) or 501, unless the taxexempt member is subject to the federal income tax on its
federal return on that share of PTE income. See Administrative
Release 6 for other members and certain PTEs that are
considered exempt.

Entities Not Required To File
A multistate PTE that operates in Maryland but is not subject to
the Maryland income tax law is not required to file, although a
return reflecting no income allocable to Maryland may be filed
for record purposes. Letters in lieu of filing will not be accepted.

Nonresident members must report their distributive or pro rata
shares of income or loss allocable to Maryland on their Maryland
income tax return. Such income must be reported in the
member’s tax year in which the PTE’s tax year ends. Credit for
taxes paid by the PTE must be claimed on the same return on
which the nonresident member reports the income subject to
that tax.

Qualified Sub-S Subsidiaries are treated as divisions under the
IRC and are not considered as separate entities for Maryland
purposes. These divisions will be included on the parent
company’s annual Maryland return.

The distributive share of income for partnerships is the net
amount of lines 1 through 11 of federal Form 1065 Schedule K.
The distributive share of income for a partnership electing to file
as a “large partnership” is the net amount derived from adding
lines 1a, 2 through 4b, 7, and 8 of federal Form 1065 Schedule
K. The pro rata share of income for S corporations is the net
amount of lines 1 through 10 of federal Form 1120S Schedule
K.

Maryland will follow the Internal Revenue Service (IRS) rules for
certain partnerships that do not actively conduct a business that
have elected not to be treated as partnerships. Maryland also
will follow the IRS rules for a single member LLC that is
disregarded as a separate entity and the income (loss) will be
included on the member(s) annual Maryland returns.

2

SIGNATURES REQUIRED

Form 510 must be signed by a duly authorized official of the
PTE. Preparers, other than PTE employees, also must sign the
return.

Purpose of Form  Form 510 is used by a pass-through entity
(PTE) to file an information income tax return for a specific tax
year or period and to remit PTE nonresident taxes. The term
“pass-through entity” includes partnerships as defined in
Internal Revenue Code (IRC) Section 761, S corporations as
defined in IRC Sections 1361 and 1362, limited liability
companies (LLC) as defined in Maryland Corporations and
Associations Article, Section 4A-101 and business trusts as
defined in Maryland Corporations and Associations Article,
Section 12-101.

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PASS-THROUGH ENTITY
INCOME TAX RETURN INSTRUCTIONS

WHEN AND WHERE TO FILE? 

The amount of tax payable by the PTE may be limited based on
the distributable cash flow. For additional information, see the
instructions for distributable cash flow limitation.

File Form 510 by the 15th day of the 4th month following the
close of the tax year or period. The return must be filed with the
Comptroller of Maryland, Revenue Administration
Division, 110 Carroll Street, Annapolis, Maryland 214110001.

A PTE may elect to file a composite Maryland income tax return
Form 510C on behalf of qualified nonresident individual
members. Fiduciary and nonresident entity members may not
participate in composite returns. All members who qualify and
elect to be included on the composite return must agree that
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PASS-THROUGH ENTITY
INCOME TAX RETURN INSTRUCTIONS

the PTE is their agent for the receipt of any refund or for
payment of any tax due. Additionally, a PTE with only one
member may not file a composite return. See Administrative
Release 6.

Schedule K-1 (510/511).
Members then may claim their shares of the Maryland credit.
Maryland follows the federal income tax rules as to the allocation
of Maryland credits for partners of a partnership (includes LLC
and business trust) and for shareholders of an S corporation,
unless the terms of the Maryland tax credit permit special
allocation. Allocations of credits at the federal level generally
must be made in accordance with the partners’ respective
interests in the partnership at the time the tax credit arises and
in accordance with the shareholders’ pro rata shares of the S
corporation’s credits. Form 502S must be included with Form
500CR if claiming the Heritage Structure Rehabilitation Tax
Credit. You must file Form 510 electronically to claim or pass on
any business tax credits.

Publicly-traded pass-through entities (PTPs) as defined in
IRC Section 7704 are exempt from the requirement to pay a
nonresident tax on behalf of their nonresident members if they
file Form 510 annually, and report the name, address, taxpayer
identification number (SSN or FEIN) and other information
requested for each nonresident member whose share of the
PTPs' nonresident taxable income exceeds $500 for the tax
year. PTPs supplying the above information are also excluded
from the definition of nonresident entities.
These PTPs should enter code number “704” on one of the lines
marked “code number” on the front of Form 510.

Statements to Members   The PTE should provide to its
members a Maryland Schedule K-1 (510/511) showing the
allocable share of income, additions and subtractions, and/or
credit information, and nonresident tax paid by the PTE on
behalf of its members.

S corporations subject to federal corporation income tax,
such as for excess net passive income or built-in gains, also are
subject to Maryland corporation income tax. Use Form 500 to
calculate the amount of Maryland corporation income tax.

Audits and Appeals   All items reported on Form 510 are
subject to audit, verification and revision. Returns and
amendments are subject to audit and adjustment for a period of
3 years from the date the return was due (including extensions)
or the date the return was filed, whichever is later.

On the Form 500:
(1)	Enter the corporation name, Federal Employer Identification
Number and tax year;
(2)	Enter the total taxable income on line 1, check the applicable
box labeled “Other” and enter “1120S”;

In the event of revision and assessment or reduced refund, the
Comptroller will notify the corporation. If in disagreement with
the assessment or denial of the refund, the corporation may file
with the Compliance Division a written request for revision of
the assessment or reconsideration of the refund denial. The
request, in either case, must be made by submitting an
application for an informal hearing with the Compliance Division
within 30 days of the assessment or denial of the refund.

(3)	Report additions and subtractions to the extent applicable to
the income subject to federal income tax; and,
(4)	Complete all other lines as necessary to calculate the
amount due (including the lines for modification and/or
adjustments to income, apportionment of income and
payments and credits, if appli­cable). Attach payment to the
front of Form 500.

Failure to file a written request or attend the informal hearing
will result in the assessment or denial of refund becoming final
and non-appealable.

In addition to filing Form 500 to calculate and pay the corporation
income tax, also file Form 510.

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2023

OTHER MATTERS

You may file an appeal with the Maryland Tax Court within 30
days of a final determination by the Compliance Division hearing
office.

Extension of Time to File  If unable to file Form 510 by the
due date, the PTE must submit Form 510/511E – Maryland
Application for Extension to File Pass-Through Entity Income
Tax Return.

NOTE: Changes made as part of an amended return are subject
to audit for up to three years from the date the amended return
is filed. See Instruction 8 for completing an amended return.

The request for extension of time to file will be granted provided
that:

Adjustments   If the items on the federal return are adjusted
by the IRS, a copy of the final IRS adjustment report must be
submitted within 90 days. Copies of the IRS adjustment report
must be submitted for each member’s income tax return.

1) The application is properly filed and submitted by the 15th
day of the 4th month following close of the tax year or
period;

Taxpayer Identification Required for Returns and Other
Documents   All returns, correspondence, payments or other
documents must indicate the PTE name, FEIN, type of tax and
tax year(s) to which the document relates.

2) An application for extension of time has been filed with the
IRS; and,
3) Full payment of any balance due is submitted with the
application.

All PTEs are required to secure a FEIN from the IRS. The FEIN
is the only number used by the IRS for processing purposes and
also is the primary number used by the Revenue Administration
Division.

Properly and timely filed requests for an automatic extension of
time will be granted for seven months for S corporations and six
months for other PTEs.

The type of tax and tax year(s) are necessary to identify the
subject of the document and the intention of payments. This
information ensures that documents are directed to the correct
area and that payments are applied to the correct account.

Estimated Income Tax   Every PTE that reasonably expects
Maryland taxable income to develop a tax in excess of $1,000
for the tax year or period must make quarterly estimated
payments with Form 510/511D - Declaration of Estimated PassThrough Entity Income Tax. If the PTE is required to make
multiple payments, it will use a Form 510/511D for each of the
additional payments. This form is available at marylandtaxes.
gov.

Use of Paid Preparers  The PTE is responsible for the timely
filing of returns, payment of tax, responding to requests and all
other requirements, even though a paid preparer is used.
Substitute Forms   You may file your Maryland income tax
return on a computer-prepared or computer-generated
substitute form provided the form is approved in advance by
the Revenue Administration Division. The fact that a software
package is available for retail purchase does not guarantee that
it has been approved for use.

Business Tax Credits   To claim or pass on business tax
credits from Form 500CR, the PTE must file Form 510
electronically if the PTE has generated a business tax credit.
Form 500CR Instructions are available on our website at
marylandtaxes.gov. Business credits are not taken on Form
510, but are allocated to the members of the PTE on Maryland

For additional information or to see a list of Approved Software
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PASS-THROUGH ENTITY
INCOME TAX RETURN INSTRUCTIONS

Vendors for Maryland
marylandtaxes.gov.

Substitute

Tax

Forms,

visit

federal business code is a six-digit number available from the
federal return which identifies the principal business activity.

Employer Withholding of Income Tax   Employers that make
payments to individuals of salaries, wages or compensation for
personal services must withhold an income tax as prescribed in
published tables and remit the withholdings to the Revenue
Administration Division with Form MW506 or MW506M –
Employer’s Return of Income Tax Withheld.

Be sure to check the applicable box to indicate the type of PTE:
partnership, S corporation, limited liability company or business
trust.
Check the applicable box if:
(1)	 The name or address has changed;
(2)	 This is the first filing of the PTE;

An annual reconciliation is required to be filed on Form MW508
– Annual Employer Withholding Reconciliation Return and
submitted with the state copy of the wage and tax statements
issued to employees as required by law.

(3)	 This is an inactive PTE (in Maryland and elsewhere);
(4)	 This is the final return of a PTE that has dissolved, liquidated
or withdrawn from Maryland;

For additional information regarding employer withholding tax,
address, and phone number, visit marylandtaxes.gov.

(5)	 This tax year’s beginning or ending dates are different from
last year’s because of an acquisition or consolidation. Do not
check the box for inactive or final if the PTE is inactive in
Maryland but active elsewhere: or,

Privacy Notice   The Revenue Admin­istration Division requests
tax return information to administer the income tax laws of
Maryland, including the determination and collection of the
correct taxes and other amounts. Failure to provide all or part
of the requested information may result in the disallowance of
claimed amounts and an increased tax liability. The law also
makes provision for securing information from taxpayers that
fail to supply required information, and a penalty may apply.

(6) The 510C has been filed.

8

To correct an error in a previously filed return, complete and
submit a revised Form 510. Check the “AMENDED RETURN” box
and draw a line through the barcode on the return. A separate
page should be attached containing a detailed explanation
of the changes being made, and if the federal return has
been amended, a copy of the federal amended form must
be attached to Form 510. If additional tax was paid with the
original return, include the amount paid on line 16b of Form
510. The PTE must give a revised statement to the members
advising them of the amendment. Members may also be
required to file amended income tax returns.

Taxpayers have a right to access their tax records maintained
by the Revenue Administration Division, and may inspect,
amend or other­wise correct them. To obtain a copy, submit a
written request containing the PTE name, address and
identification numbers and specifying the information needed.
The request must be signed by an authorized member.
As authorized by law, information furnished to the Revenue
Administration Division may be given to the IRS, a proper
official of any state that exchanges tax information with
Maryland and to an officer of this State having a right to the
information in that officer’s capacity. Also, the information may
be obtained in accordance with a proper judicial or legislative
order.

6

A PTE may not file an amended return to change the
PTE's election or non-election for the tax year.

9

TAX YEAR OR PERIOD

SPECIFIC INSTRUCTIONS

Line 1 - Number of members   Enter the number of members
that are individual residents of Maryland (including resident
fiduciaries), the number that are individual nonresidents of
Maryland (including nonresident fiduciaries), the number of
nonresident entities, the number of other entities, including
resident entities, and the total number of all members.

The tax year is shown at the top of Form 510. The form used
for filing must reflect the preprinted tax year in which the PTE’s
tax year begins. The same tax year or period used for the
federal return must be used for Form 510.

Include in “Others”, resident entities and entities that are taxexempt under IRC Sections 408(e) or 501.

If the tax year of the PTE is other than a calendar year, enter
the beginning and ending dates of the fiscal year in the space
provided at the top of Form 510.

7

AMENDED RETURNS

A single member LLC that is a disregarded entity for federal
purposes is treated as an individual or corporation depending
upon whether the single member is an individual or corporation
for purposes of computing the nonresident tax.

ASSEMBLING AND COMPLETING YOUR RETURN

Complete the federal income tax return first and use it in
preparation of the Maryland return. Use a minus sign (-) in front
of a number to indicate a negative amount. After completing
the Maryland return, assemble your return in the following
order: Maryland Pass-Through Entity Form 510 including all
Form 510 Schedules B, any required Maryland forms and their
related attachments, any K-1 forms showing credits earned by
the PTE and for S corporations a copy of the federal income tax
return through Schedule M2.

Note: In these instructions, the term individual includes
fiduciaries, unless specifically excepted.
Line 2 - Total distributive or pro rata shares of income
per federal return   Enter the distributive or pro rata share of
income from the federal return. Distributive or pro rata share
of income is defined for this purpose as the net amount of
income/loss for the PTE, less interest from federal obligations.
The distributive share of income for partnerships is the net
amount of lines 1 through 11 of federal Form 1065 Schedule K.

Name, Address and Other Information

Allocation of Income   For unistate PTEs, all income is
allocable to Maryland. If the entity is unistate, meaning that
business is conducted only in Maryland, do not complete this
area.

Type or print the required information in the designated area.
Enter the exact PTE name and continue with any “Trading As”
(T/A) name if applicable.
Enter the FEIN. If a FEIN has not been secured, enter “APPLIED
FOR” followed by the date of application. If a FEIN has not been
applied for, do so immediately.

Multistate PTEs, those conducting business in more than one
state, must allocate income if any member is a nonresident
individual or a nonresident/resident entity. If there are no
nonresident members, do not complete this area.

Enter the date of organization or incorporation and the federal
business code number. This date must be expressed numerically,
using two digits each for the month, the day and the year. The

Line 3a - Non-Maryland income   Multistate partnerships with
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Line 12 - Nonresident entity tax   Multiply the amount on
line 11 by 8.25%.

one or more nonresident partners may use separate accounting
to allocate income. Multistate S corporations with one or more
nonresident shareholders may use separate account­ing if the
activity of the corporation within Maryland is nonunitary. If
using separate accounting, enter the amount of income or loss
allocable to other states and attach a worksheet detailing the
alloca­tion between or among the states.

Line 13 - Total nonresident tax   Add lines 9 and 12.
Line 14 - Distributable cash flow limitation   PTEs may elect
to use the distributable cash flow method to limit the nonresident
tax which must be paid by the PTE. See the DISTRIBUTABLE
CASH FLOW LIMITATION WORKSHEET (9A). If the distributable
cash flow is less than the nonresident tax, the required payment
is limited to the amount determined by the distributable cash
flow method.

Line 3b - Multi-state PTEs using the apportionment method of
allocation generally are required to use a single receipts factor.
Property and payroll factors must be developed if the taxpayer
has income from the sale of intangibles or is subject to another
apportionment formula. If the taxpayer does not have
income from the sale of intangibles and is not subject to
another apportionment formula, property and payroll
factors are not required to be developed. See instructions
below under OTHER APPORTIONMENT FORMULAS and
SPECIAL RULES.

DISTRIBUTABLE CASH FLOW LIMITATION WORKSHEET (9A)
(Complete this worksheet only if using the distributable cash flow
limitation.)

Line 4 - Distributive or pro rata share of income allocable
to Maryland   For unistate PTEs, or multistate PTEs without
nonresident members, enter the amount shown on line 2.

A.

Total distributive or pro rata share
of income. (Enter amount from Form
510, line 2.) . . . . . . . . . . . . . . . . . . . . . . . . . ________________

B.

Line A adjusted, in the case of a PTE using
the accrual method of accounting to report
federal taxable income, to reflect the amount
of taxable income that would have been
reported under the cash method of accounting
(if the PTE is not using the accrual method
of accounting to report federal taxable
income, enter amount from Line A).. . . . . . ________________

C.

Cash receipts for the tax year that are
not includable in the gross income of the
PTE including capital contributions and
loan proceeds. (Enter any cash receipts
received by the PTE that were not included
in gross income including capital contributions
and loan proceeds.). . . . . . . . . . . . . . . . . . . . ________________

D.

Amounts allowable to the PTE for the tax
year as deductions for depreciation,
amortization and depletion. (Enter the allowable
depreciation, amortization and/or depletion used
as a deduction from federal taxable income.)	 ________________

E.

The decrease, if any, in the PTE’s liability
reserve as of the end of the tax year. (If the
PTE has established a liability reserve, enter
the amount that represents the decrease, if any,
in this reserve account. Liability reserve means
accrued unpaid liabilities that are not deductible
in computing taxable income.) . . . . . . . . . . . . ________________

F.

Total. (Add lines B through E.) . . . . . . . . . . . . ________________

G.

Cash expenditures for the tax year that are
not deductible in computing the taxable
income of the PTE. (Do not include distributions
to members. Enter any cash expenditures that
are not deducted when computing taxable
income for the PTE. Items such as distributions
to members are not included in this amount.). . ________________

H.

The increase, if any, in the PTE’s liability
reserve as of the end of the tax year. (If
the PTE has established a liability reserve,
enter the amount that represents the increase,
if any, in this reserve account. Liability reserve
means accrued unpaid liabilities that are not
deductible in computing taxable income.). . . . . ________________

I.

Total distributable cash flow. (Add lines G and
H, and subtract the total from line F.) . . . . . . . ________________

J.

Total percentage of ownership (or profit/
loss sharing if applicable) by nonresident.
(Enter the sum of the percentages
from Form 510, lines 5 and 10. . . . . . . . . . . . . ________________

K.

Distributable cash flow. (Multiply line I
by line J.). . . . . . . . . . . . . . . . . . . . . . . . . . . ________________

L.

Nonresident tax previously paid. (Enter all
nonresident estimated tax paid with Forms
510/511D or 510/511E.). . . . . . . . . . . . . . . . . ________________

For multistate PTEs using separate accounting, subtract line 3a
from line 2 and enter the difference. For multistate PTEs using
the apportionment method of allocation, multiply line 2 by the
factor on line 3b and enter the result.
NOTE: Do not complete lines 5 through 19:
1. Unless the PTE has members that are nonresidents of
Maryland (there is an entry on 1b or 1d), or,
2. If the PTE is a partnership whose activities and assets are
limited to investment in stocks, bonds, futures, options or debt
obligations other than debt instruments directly secured by real
or tangible personal property, it is not subject to the nonresident
tax merely because the investment decisions, trading orders,
research and the like are conducted by a general partner from
a Maryland location. Enter code number “705” on one of the
lines marked “code number” on page 3 of Form 510.
Partnerships, however, such as brokerage firms that deal with
the general public, are not exempt if the business is conducted
within Maryland and should complete lines 5-19. See
Administrative Release 6.
Line 5 - Percentage of ownership by nonresident individual
members  Enter the total percentage of ownership by
nonresident individual members. If the profit/loss allocation is
different from the ownership percentage, use the profit/loss
allocation to complete this line. If 100%, leave blank.
Line 6 - Distributive or pro rata share of income for
nonresident individual members   Multiply line 4 by the
percentage on line 5 and enter the result. If line 5 is blank
because the percentage of ownership equals 100%, enter the
amount from line 4.
Line 7 - Nonresident individual tax   Multiply the amount on
line 6 by 5.75%.
Line 8 - Special nonresident tax   Multiply the amount on line
6 by 2.25%. All nonresident individuals are liable for an
additional state tax on income allocable to Maryland calculated
at the lowest local income tax rate in place for the tax year.
Line 9 - Total Maryland tax on individual members   Add
lines 7 and 8.
Line 10 - Percentage of ownership by nonresident entity
members Enter the total percentage of ownership by
nonresident entity members. If the profit/loss allocation is
different from the ownership percentage, use the profit/loss
allocation to complete this line. If 100%, leave blank.
Line 11 - Distributive or pro rata share of income for
nonresident entity members   Multiply line 4 by the
percentage on line 10 and enter the result. If line 10 is blank
because the percentage of ownership equals 100%, enter the
amount from line 4.
4

MARYLAND
FORM

510

of the 2023 return but before January 1, 2025. Assistance in
calculating interest is available through our website at
marylandtaxes.gov or email your question to TAXHELP@
marylandtaxes.gov. You may also call 1-800-638-2937 or
from central Maryland 410-260-7980.

M. Distributable cash flow limitation. (Subtract
line L from line K. If less than 0, enter 0.) . . . . ________________

Election of the distributable cash flow limitation will not
reduce the tax liability of the nonresident members.
If the distributable cash flow limitation is used, check the box
and enter the result on line 14. If less than zero, enter zero. If
the distributable cash flow limitation is not used, do not complete
this line.

A penalty may be imposed if any tax is not paid when due. Any
penalty due will be calculated and assessed after filing of Form
510.
Line 20 - Total Nonresident Balance Due  Add nonresident
tax due (Line 15), any prior overpayment (Line 18a),
and any interest and/or penalty (Line 19). Then
subtract the total payments and credits (line 16f

Line 15 - Nonresident tax due   If the distributable cash flow
limitation is not used, enter the amount shown on line 13. If the
distributable cash flow method is used, enter the lesser of line
13 or line 14.

Line 21 - Amount of overpayment from original return to
be applied to estimated tax for 2024. Overpayment may be
applied to estimated taxes for the following year.
Amount may not exceed 2023 overpayment, less any
prior year overpayment, less interest and/or penalty.

Line 16 - Payments and Credits
16a.	 Enter the total of amounts paid during the tax year with
Form 510/511D - Maryland Pass-Through Entity
Declaration of Estimated Income Tax. Also include
amounts paid by the PTE using Form MW506NRS - Return
of Income Tax Withheld For Nonresident Sale of Real
Property.

Line 22 - Amount of overpayment TO BE REFUNDED to the PTE.
Add lines 19 and 21, and subtract the total from line
18. (If amending, subtract lines 18a and 19 from
line 18.)

16b.	 Enter the amount paid with Form 510/511E - Maryland
Application for Extension to File Pass-Through Entity
Income Tax Return.

LINE 23 - Direct Deposit of Refund
To comply with banking and National Automated Clearing
House Association (NACHA) rules, we ask you to indicate by
checking the appropriate box on your return if the state refund
is going to an account outside the United States. If you indicate
that this is the case, STOP! do not enter your routing and
account numbers, as the direct deposit option is not available to
you. We will send you a paper check.

16c.	 Enter the amount of tax paid on the PTE’s behalf by
another PTE. Attach the Maryland Schedule K-1
(510/511) or statement supplied by the other PTE to
support this credit.
16d.	

16e.	

2023

PASS-THROUGH ENTITY
INCOME TAX RETURN INSTRUCTIONS

If the PTE filing this return is a nonresident member
of a PTE paying tax at the entity level, report the
amount of credit for tax paid by the PTE paying tax
at the entity level with regard to this entity's nonresident
shares of income. Attach the Maryland Schedule K-1
(510/511) or statement supplied by the other PTE to
support this credit.

By choosing direct deposit of your refund and checking the
appropriate box, you authorize the State of Maryland to disclose
to your bank to the State’s depository bank and their financial
partners, and NACHA any tax return information necessary to
make the deposit, such as your refund amount, the name, as it
appears on the bank account. Complete lines 23a, b, c, and d of
Form 510 if you want us to deposit your refund directly into your
account at a bank or other financial institution (such as a mutual
fund, brokerage firm or credit union) in the United States.

If the PTE filing this return is a resident member of
a PTE paying tax at the entity level, report the
amount of credit for tax paid by the PTE paying tax
at the
entity level with regard to this entity's resident
shares of income. Attach the Maryland Schedule K-1
(510/511) or statement supplied by the other PTE to
support this credit.

10

	 SIGNATURE, VERIFICATION AND MAILING
	INSTRUCTIONS

An authorized general partner, officer or member of the PTE
must sign and date Form 510 and enter his or her title. If a
preparer is used, the preparer also must print name, sign the
return and enter the firm name, address and Preparer's Tax
Identification Number (PTIN). Penalties may be imposed for tax
preparers who fail to sign the tax return and provide their PTIN.

16f. Total payments and credits. Enter the sum of lines
16a through 16e.
Line 17 - Balance of Tax Due Enter the difference if line 15
exceeds 16f.
Line 18 - Overpayment If total payments and credits from
line 16f exceeds nonresident tax due from line
15, enter the difference.

Make check or money order payable to Comptroller of
Maryland. On your check or money order, in blue or black
ink only, you must include the Federal Employer
Identification Number, tax year, and tax type. Failure to
include this information will delay the processing of your
payment. Mail the completed return and all required
attachments to:

Line 18a - For PTEs using this form to amend a prior return.
Enter the prior overpayment. (Total all refunds
previously issued.)

Comptroller of Maryland
Revenue Administration Division
110 Carroll Street
Annapolis, MD 21411-0001

Line 19 - Interest and/or Penalty Calculate the amount of
interest and/or penalty due as a result of the underpayment of
estimated tax. Use Form 500UP, available at marylandtaxes.
gov.

For more information, visit marylandtaxes.gov or email your
question to: [email protected]. You may also call
1-800-638-2937 or from Central Maryland 410-260-7980.

Partnerships and LLCs with income received unevenly throughout
the year, and that choose to annualize on Form 500UP, must
enter code number “301” on one of the lines marked “code
numbers” on the front of Form 510. S corporations may not use
the annualization method on Form 500UP.
If Form 510 is filed late, calculate interest on the amount of tax
that was not paid by the original due date. Interest is due at the
rate of 10.0075% annually or 0.8339% per month for any month
or part of a month that a tax is paid after the original due date
5

MARYLAND
FORM

2023

SCHEDULES A AND B INSTRUCTIONS

510

SCHEDULE A - COMPUTATION OF APPORTIONMENT
FACTOR INSTRUCTIONS

1

personal property is located in this State for a portion of
the tax year, only the income received for that portion is
included in the numerator.

PURPOSE OF SCHEDULE A

Capital gains from the sale of real and tangible personal
property are included in the numerator if the property is
located in Maryland. Ordinary net gain or loss derived from
the sale of depreciable assets is excluded from the factor.

Pass-through entities (PTEs) that conduct business in more than
one state must allocate income if one or more of the members
are nonresident individuals or nonresident entities of Maryland.
Partnerships may use separate accounting or the apportionment
method of alloca­tion. S corporations must use the apportionment
method unless the activity in Maryland is nonunitary. If the
activity within Maryland is nonunitary, S corporations may use
separate accounting.

2

Other income items are included in accordance with the
provisions previously stated depending on the nature and
type of each item.
•	

The property factor includes owned as well as rented
tangible personal property used in the trade or business
during the tax year. Such properties are inventory,
machinery and equipment, buildings and land, and other
tangible assets. Property is included in the numerator if it
has a situs within Maryland.

APPORTIONMENT FORMULA

All factors of the apportionment formula are developed as
fractions, the numerator of which is the total of Maryland items
and the denominator is the total of items everywhere during the
tax year. Each factor is calculated to six decimal places and
used to arrive at the final apportionment factor. The items of
both numerator and denominator should reconcile to the items
as categorized and reported on the federal income tax return.

3

Property owned by the PTE is valued at its original cost at
the average of the tax year beginning and ending amounts.
If there are material changes during the tax year and the
yearly average is not a fair representation, the average
must be calculated on a monthly or daily basis.

SINGLE SALES FACTOR APPORTIONMENT

Property in transit is considered to be at its destination
for purposes of the factor. Property under construction
during the tax year is excluded from the factor until actually
placed in service.

For tax years beginning after December 31, 2021, multi-state
businesses using the apportionment method of allocation
generally are required to use a single receipts factor. Rental/
leasing companies, financial institutions, transportation
companies, and worldwide headquartered companies must use
a Special Apportionment Formula (see instruction 4 below),
unless the Comptroller has accepted an Alternative
Apportionment Formula (see instruction 5 below). Property and
payroll factors must be developed if the taxpayer has income
from the sale of intangibles or is subject to another apportionment
formula. If the taxpayer does not have income from the
sale of intangibles and is not subject to a special
apportionment formula or alternative apportionment
formula property and payroll factors are not required to
be developed.

Property leased or rented by the PTE is included in the
factor at a capitalized value. To arrive at the capitalized
value, expenses associated with the privilege of occupying
or using the property, including such items as fixed rent,
percentage rent, real estate taxes, insurance and
maintenance, are multiplied by eight. Expenses for gas,
electricity, oil, water or other items normally consumed are
excluded.
Lease or rental expense below the market rate must
be adjusted to reflect a reasonable market rate and then
capitalized. Sublease income cannot be used to arrive at
the capitalized value of leased or rented property, but must
be included in the receipts factor.

Specific require­ments regarding each factor are set forth as
follows:
•	

Property Factor

Improvements to the leased or rented property that
revert to the owner at expiration of the lease or rental term
are amortized and not capitalized. The actual cost of the
improvements is divided by the number of years remaining
for the lease or rental term and the result is included in the
factor for each tax year.

Receipts Factor
The receipts factor includes the amount of income reported
during the tax year as gross receipts or sales (less returns
and allowances), dividends, interest, gross rents, royalties,
capital gains and other income on the federal return.

Property that has remained idle and has not produced
any revenue for a period of five or more years is not
included in the factor.

Gross receipts from sales of tangible personal property
are included in the numerator if the property is delivered or
shipped to a purchaser that takes possession in Maryland,
regardless of f.o.b. point or other conditions of sale. Sales
of tangible personal property to an out-of-state purchaser
are also included in the numerator if the purchaser takes
possession in Maryland. Sales of property in transit that are
destined for Maryland are included in the numerator.

•	

Payroll Factor
All compensation is to be included in the numerator, both
when the individual’s service is performed entirely within
Maryland, and when the individual’s service is performed
both within and without Maryland but the service performed
outside Maryland is incidental to the individual's service
within.

Gross receipts from service-related activities are included
in the numerator if the receipts are derived from customers
within this State. There are specific rules to determine
“Customers Within this State.” To review these rules, see
Maryland Regulation 03.04.03.08D.
Gross income from intangible items such as dividends,
interest, royalties and capital gains from the sale of
intangible property are included in the numerator based
upon the average of the property and payroll factors.

4

Gross receipts from the rental, leasing or licensing of
real or tangible personal property are included in the
numerator if the property is located in Maryland. If tangible

Compensation is also included in the numerator if some part
of the service is performed within Maryland and the base of
operations or place from which the service is controlled is in
Maryland. If the base of operations or place from which the
service is controlled is not in any state where the service is
performed but the individual’s residence is in Maryland, the
compensation is also included in the numerator.
OTHER APPORTIONMENT FORMULAS

Rental/leasing companies use an equally weighted two-factor
6

MARYLAND
FORM

SCHEDULES A AND B INSTRUCTIONS

510

formula of receipts and property, with receipts from intangible
items excluded.

and corporation members.
Do not enter a credit amount for the One Maryland Economic
Development Tax Credit, see the instructions for Form 500CR,
Part P, at marylandtaxes.gov.

Financial institutions use a single receipts factor; financial
institution receipts are defined in COMAR 03.04.08.03.
Transportation companies:
•	 A trucking company or motorfreight carrier uses an
apportionment formula equal to miles traveled in the State
over miles traveled everywhere.
•	 A railroad company uses an apportionment formula equal to
miles traveled on tracks in-State over miles traveled on
tracks everywhere.
•	 A shipping company uses an apportionment formula equal to
the number of days spent in ports and on waterways inState over number of days spent in ports and on waterways
everywhere and worldwide headquartered companies
required to use a Special Apportionment Formula should
refer to Administrative Release 43: Corporate Apportionment
of Income. https://marylandtaxes.gov/forms/Tax_
Publications/Administrative_Releases/Income_and_Estate_
Tax_Releases/ar_it43.pdf.
•	 An airline uses an apportionment formula of equally weighted
property, payroll, and sales. COMAR 03.04.03.08(G)(3)-(6)
prescribe how each factor is calculated.
•	 Transportation company can refer to Administrative Release
43 https://marylandtaxes.gov/forms/Tax_Publications/
Administrative_Releases/Income_and_Estate_Tax_Releases/
ar_it43.pdf and Administrative Release 22 (airlines) https://
marylandtaxes.gov/forms/Tax_Publications/Administrative_
Releases/Income_and_Estate_Tax_Releases/ar_it22.pdf for
additional information.

5

2023

SPECIAL RULES

Alternative Apportionment: If the apportionment formula does
not fairly represent the extent of the PTE’s activity within
Maryland, the Revenue Administration Division may alter the
formula or components accordingly. The corporation may also
request the Comptroller’s approval to use an Alternative
Apportionment Formula.
The PTE’s share of receipts, property and payroll of a partnership
or joint venture is included in the entity’s factors as if they were
the direct receipts, property and payroll of the entity. The
partnership share is included only to the extent of the factors
required for the PTE.
SCHEDULE B - MEMBER'S INFORMATION INSTRUCTIONS
Enter all information requested in this schedule. Enter the
name, address and Social Security number or FEIN of each
member. Also check the applicable box to identify the member
as a resident, or nonresident or nonresident entity of Maryland.
For each shareholder, the pro rata share of income/loss is a
portion of the amount on line 2, page 1 of Form 510.
For other members, the distributive share of income/loss is a
portion of the amount on line 2, page 1 of Form 510.
Enter the amount of tax paid on behalf of each nonresident/
resident member included in line 15.
Enter the distributive or pro rata share of the business income
tax credit being claimed by each member from Forms 500CR or
502S. For multiple credits enter the total distributive or pro rata
amount for each member. See the instructions for Forms 500CR
or 502S.
Reminder: The PTE must file Form 510 electronically to pass on
a business tax credit from Form 500CR or from Form 502S.
Enter the total distributive or pro rata share of tax paid, and the
total distributive or pro rata share of tax credit for individual
members, fiduciary members, pass-through entity members,
7

COMPTROLLER OF MARYLAND
REGISTRATION & TAXES
Registration and Licensing All new businesses (corporations,
S corporations, partnerships, limited liability companies,
business trusts, and sole propri­e torships) can file a single
application with the Central Registration Unit of the
Revenue Administration Division of the Comptroller’s Office to
establish accounts for employer income tax withholding, sales
and use tax, admissions and amusement tax, tire recycling
fee, motor fuel tax, alcohol tax and tobacco tax. The Revenue
Administration Division offers assistance for filing applications
and establishing accounts.
The Central Registration Unit assigns a single state
identification number for the taxes listed above. Register
online at marylandtaxes.gov.
To obtain a direct wine shipper's permit and a common carrier
permit, businesses may apply with the Licensing Unit of the
Alcohol and Tobacco Commission.
Corporation Income Tax The corporation income tax applies
to every Maryland corporation and every other corporation
which has a nexus with Maryland. Nexus is the term used to
indicate a taxable connection between a corporation and a
taxing authority. If a corporation conducts business activity
within Maryland and exceeds the provisions of U.S.C.A. Title
15, Section 381 of the Interstate Commerce Act (P.L. 86-272)
it has a nexus and must file an income tax return.
The tax is based on federal taxable income after state
modifications. Corporations engaged in multistate operations
must allocate income using an apportionment formula,
generally consisting of receipts, property and payroll factors.
The tax is imposed at a flat rate of 8.25% of Maryland taxable
income.
Employer Withholding of Income Tax Employers making
payments to individuals of salaries, wages or compensation for
personal services must withhold income tax and remit the
withholding to the Revenue Administration Division. The
amount of tax to be withheld is prescribed in published tables
which are based on the individual income tax rates.
Sales and Use Tax This tax applies to businesses selling in
Maryland, facilitating sales into Maryland via a marketplace, or
purchasing out of state for Maryland use.
The general Maryland sales and use tax rate is 6%. An 8%
rate is imposed on rental trucks, and peer-to-peer car sharing
and a rate of 11.5% is charged on rentals of passenger cars
and recreational vehicles. A 9% tax rate is also imposed on
alcoholic beverages and cannabis. A rate of 12% is imposed on
the sale of electronic smoking devices and tobacco pipes. A
rate of 60% is imposed on the sale of vaping liquid in containers
of 5ml or less. Most sales of food by substantial grocery or
market businesses are not subject to tax. Specific prepared
foods purchased in grocery stores are subject to tax. Other
exemptions include all sales solely for resale, medicine, energy
for residential use, manufacturing machinery and equipment,
and cer tain agri­c ultural equipment and supplies. For
exemptions not listed, visit marylandtaxes.gov.
Electronic Smoking Devices and Tobacco Pipes The tax
on the sale of electronic smoking devices (ESDs) and tobacco
pipes is 12% of the charge for the ESD or tobacco pipe.
Vaping Liquid The tax on the sale of vaping liquid in
containers of 5ml or less is 60% of the charge for the vaping
liquid.
Truck Rentals and peer-to-peer car sharing The tax for a
truck rental and peer-to-peer car sharing is 8 cents for each
exact dollar; and 2 cents for each 25 cents of part of 25 cents
in excess of an exact dollar.
911 Fe e S ur c har ge
Seller s of pr epaid wir ele s s
telecommunications services are required to report and remit
to the Comptroller all Prepaid Wireless E-9-1-1 Fees collected
by the seller for retail transactions of prepaid wireless
telecommunications. The Prepaid Wireless E-9-1-1 Fee is 60

cents per retail transaction. The seller must report the fees
collected on a Maryland Sales and Use Tax return, although
the Prepaid Wireless E-9-1-1 Fee itself is not subject to
Maryland sales and use tax.
Motor Fuel Tax Generally, this tax applies to businesses
selling or using motor fuel in Maryland.
The Maryland motor fuel tax rate is currently 36.10¢ per gallon
of gasoline and 36.85¢ per gallon of diesel fuel. There are
other require­ments for motor carriers, dealers, special fuel
users, sellers and service station operators.
Maryland implemented the International Fuel Tax Agreement
(IFTA) for motor carriers on 1/1/96.
Alcohol and Tobacco Tax These taxes apply to businesses
manufacturing, selling, distributing or storing alcoholic
beverages or selling and/or distributing cigarettes and other
tobacco products in Maryland.
The Maryland excise tax rates on alcoholic beverages are
$1.50 per gallon of distilled spirits, 40¢ per gallon of wine, and
9¢ per gallon of beer. The tobacco tax rate is $3.75 per pack
of 20 cigarettes; the rate is 53% of the wholesale price for
other tobacco products.
Admissions and Amusement Tax This tax is imposed on a
variety of activities, such as admission to any place, including
motion pictures, athletic events, races, shows or exhibits. Also
subject to this tax are receipts from athletic equipment rentals,
bingo, coin-operated amusement devices, boat rides and
excursions, amusement rides, golf green fees, golf cart
rentals, skating, bowling shoe rentals, lift tickets, riding
academies, horse rentals, and merchandise, refreshments, or
a service sold or served in connection with entertainment.
The admissions and amusement tax is a local tax collected by
the Comptroller’s Office on behalf of Maryland’s counties,
Baltimore City, other incorporated cities and towns. The tax is
set by the localities at rates varying from one-half of 1% to
10% of the admissions and amusement receipts. When the
gross receipts are also subject to the sales and use tax, the
combined tax rate may not exceed 11%.
A separate State admissions and amusement tax is imposed
on the net proceeds from electronic bingo or electronic tip
jars. When the net proceeds are also subject to a local tax,
the combined tax rate may not exceed 35%.
Digital Advertising Gross Revenues Tax Quarterly
estimated tax returns for this tax type must be filed by
every person that reasonably expects its Maryland
gross revenues attributable to digital advertising services,
including banner advertising, search engine advertising,
interstitial advertising, and other comparable advertising
services, to exceed $1,000,000 for the calendar year. The
applicable tax rate depends on the person’s global annual
gross revenues and ranges from 2.5% to 10% of annual gross
revenues derived from digital advertising services in Maryland.
Annual returns are due by April 15 of the next calendar year.
Tire Recycling Fee This fee applies to tire wholesalers or a
tire retailer who buys tires from out-of-state sources.
Registration and payment of the fee is handled by the Revenue
Administration Division.
Utility Surcharges These surcharges are collected by electric
companies that deliver electricity in Maryland and by telephone
companies doing business in Mar yland. The electricity
surcharges are then paid to the Comptroller for deposit in the
Environmental Trust and Universal Service Program Funds.
The telecommunications surcharges are paid to the Comptroller
for deposit in the 911 Emergency Telephone System and
Communications Access of Maryland Funds.
The utilit y surcharges are collected by the Revenue
Administration Division.
Direct Wine Shipper's Permit This permit is required for all
in-state and out-of-state wine manufacturers that ship wine,
including pomace brandy, directly to a Maryland consumer
through a common carrier, such as Federal Express or UPS.

Common Carrier Permit This permit is required for a common
carrier to deliver wine to a Maryland consumer.
OTHER REGISTRATIONS & TAXES
New Corporations In addition to registering with the Central
Registration Unit of the Comptroller’s Office, all corporations
doing business in Maryland must register with the Department
of Assessments and Taxation. This is also the office to contact
to form a new corporation.
Bay Restoration Fee This fee is collected by all non-exempt
local governmental entities, billing authorities, drinking water
and sewage water treatment plant owners, who provide water
or sewage services to residential, multi-residential, and nonresidential users. County governments are responsible for
collecting a septic fee from owners of private wells and septic
systems. The fees are remitted by these entities quarterly to
the Comptroller for deposit to the Bay Restoration Fund.
Public Service Company Franchise Tax In addition to
corporation income tax, public service companies are subject to
the franchise tax on gross receipts. This tax is administered by
the Department of Assessments and Taxation.
Insurance Company Premium Tax Insurance companies are
exempt from the corpora­tion income tax but are subject to the
premium tax that is administered by the Maryland Insurance
Administration.
Unemployment Insurance Employers are subject to the
Maryland Department of Labor’s unemployment insurance
requirements and must visit the Maryland Department of Labor
website at: employer.beacon.labor.md.gov/ to establish an
account.
Workers’ Compensation Employers in Maryland must provide
Workers’ Compensation Insurance for all employees. Employers
may obtain coverage from a private insurance company, by
becoming self-insured or by contacting the State Injured
Workers’ Insurance Fund. Employers believing they are not
required to obtain this insurance may contact the Workers’
Compensation Commission for certification of compliance.
Business Licenses Licenses are required for certain businesses
to operate in Maryland. To determine if a license is necessary,
contact the clerk of the circuit court in the Maryland county (or
Baltimore City) where the business operates. A circuit court is
located in each of those jurisdictions.
OTHER REQUIREMENTS
Bulk Sales When an existing business is bought, the purchaser
must pay a 6% bulk sales and use tax on the price of tangible
personal property, such as furniture and fixtures, that is part of
the business. This tax is collected by the Compliance Division of
the Comptroller’s Office.
Dissolution of Corporation Articles of Dissolution must be
filed with the Department of Assessments and Taxation for the
dissolution of a corporation. A tax clearance certificate is no
longer required for the dissolution of a corporation.
Unclaimed Property Unclaimed funds such as wages,
insurance benefits, bank accounts or security deposits must be
reported if they remain unclaimed for three years. This property
must be reported to the Unclaimed Property Division.
NOTE: The information provided on this page is a brief summary
of the various Maryland business requirements and is based on
the law in effect as of 7/1/2023. For additional information, see
the next page for the addresses and phone numbers of the
Maryland agencies most frequently contacted by businesses.

MARYLAND STATE AGENCIES MOST FREQUENTLY CONTACTED BY BUSINESSES
COMPTROLLER OF MARYLAND. . . . . .marylandtaxes.gov
Online business registration . . . . . . .	marylandtaxes.gov
New businesses can register online and set up tax accounts any time 24 hours a day.
For other new business information, visit the Business License
Information System at choosemaryland.org/blis

OTHER AGENCIES
Department of Agriculture
50 Harry S. Truman Parkway .  .  .  .  .  .  .  .  .  410-841-5700
Annapolis, MD 21401 .  .  .  .  .  .  .  .  .  .  .  . or 800-492-5590
. . . . . . . . . . . . . . . . . . . . . mda.maryland.gov
Conservation tillage equipment certification.  .  .  410-841-5866

410-767-1579
410-649-0633
888-614-6337
410-767-1530
800-492-1752
410-767-1700
800-782-7383

Department of Assessments & Taxation
301 W. Preston Street, Room 801
Baltimore, MD 21201-2395
. . . . . . . . . . . . . . . . . . . . . dat.maryland.gov
Charter/incorporation information.  .  .  .  .  .  .  .  410-767-1350
Public service company franchise tax.  .  .  .  .  .  410-767-1940
New corporation information.  .  .  .  .  .  .  .  .  .  410-767-1350
Resident agent information.  .  .  .  .  .  .  .  .  .  .  410-767-1330
Personal property tax assessments.  .  .  .  .  .  .  410-767-1170
. . . . . . . . . . . . . . . . . . . . . . or 888-246-5941
Property tax credits .  .  .  .  .  .  .  .  .  .  .  .  .  .  410-767-4433

Good Standings .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 410-260-7352
. . . . . . . . . . . . . . . . . . . . . . or 888-784-0144

Department of Commerce
401 E. Pratt St. .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  410-767-6300
Baltimore, MD 21202 .  .  .  .  .  .  .  .  .  .  .  . or 888-246-6736
. . . . . . . . . . . . . . . . . . commerce.maryland.gov
Tax Incentives.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  410-767-6438

Compliance Division
301 W. Preston Street
Baltimore, MD 21201-2383
Bulk sales.  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .
Business tax collections.  .  .  .  .  .  .  .  .  .  .  .
. . . . . . . . . . . . . . . . . . . . . . or
Sales & use tax and tire fee refunds .  .  .  .  .
. . . . . . . . . . . . . . . . . . . . . . or
Unclaimed property.  .  .  .  .  .  .  .  .  .  .  .  .  .
. . . . . . . . . . . . . . . . . . . . . . or
General Accounting Division
Goldstein Treasury Building, Room 200
Annapolis, MD 21404-0746

Field Enforcement Division
Goldstein Treasury Building, Room 310
Annapolis, MD 21404-2397
Enforcement & Inspections.  .  .  .  .  .  .  .  .  .  .
. . . . . . . . . . . . . . . . . . . . . . or
State License Bureau .  .  .  .  .  .  .  .  .  .  .  .  .
. . . . . . . . . . . . . . . . . . . . . . or
Motor Fuel Testing Laboratory.  .  .  .  .  .  .  .  .

410-260-7388
888-674-0017
410-260-6240
866-239-9359
410-799-7777

Revenue Administration Division
Revenue Administration Center
Annapolis, MD 21411-0001
Forms (all income tax and employer withholding)
	 .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 410-260-7951
Facsimile transmittal.  .  .  .  .  .  .  .  .  .  .  .  .  . 410-974-2967
Taxpayer Services Division
Income tax information .  .  .  .  .  .  .  .  .  .  .  .
(Corporation, Individual, Fiduciary, Pass-Through Entity).or
Income tax refund inquiries .  .  .  .  .  .  .  .  .  .
. . . . . . . . . . . . . . . . . . . . . . or
Tax-exempt organization registration.  .  .  .  .  .
. . . . . . . . . . . . . . . . . . . . . . or

410-260-7980
800-638-2937
410-260-7701
800-218-8160
410-260-7980	
800-638-2937

Motor-fuel, Alcohol & Tobacco Tax Unit
P.O. Box 2999
Annapolis, MD 21404-2999
Motor-fuel Licensing & Registration.  .  .  .  .  .  .
. . . . . . . . . . . . . . . . . . . . . . or
Motor Carrier & IFTA Licensing.  .  .  .  .  .  .  .  .
. . . . . . . . . . . . . . . . . . . . . . or
Alcohol & Tobacco Licenses & Permits .  .  .  .  .
. . . . . . . . . . . . . . . . . . . . . . or

410-260-7980
800-638-2937
410-260-7980
800-638-2937
410-260-7980
800-638-2937

Annapolis area office (by appointment only)