On June 21, the Supreme Court ruled that states can force online retailers to collect sales tax. This could place a burden on smaller businesses in Maryland and throughout the country. By not collecting sales taxes, companies that did business online could offer their goods cheaper than those with physical retail locations. Furthermore, smaller retailers will now have to deal with the regulatory burden of collecting sales taxes.
In the state of Maryland, there are several scenarios in which a business must collect and pay sales and use taxes. Even if a company does not have any taxable sales in a given quarter, it must still file a report by the 21st of the month following the end of that quarter. Sales taxes can be paid quarterly for businesses that have $750 or less in sales taxes owed.
Many small businesses in Maryland do business over the internet as well as in person, and the growth of largely online businesses has also led to concerns about state sales tax collection. In January 2018, the U.S. Supreme Court agreed that it would hear a case on whether states can collect sales taxes on internet sales from businesses that do not have a physical presence in the state.
While Maryland residents may sometimes worry about the chances of being audited by the IRS on their taxes, the chances of it happening are actually rather small for most people. However, those who would like to keep their chances even lower may want to engage in some practices that keep them off the radar.
Maryland residents may be used to paying sales tax on most purchases that they make. However, they do not pay as much as Hawaiians. Hawaii residents pay an average of $2,090 in sales taxes each year. North Dakota, Washington, Nevada and Wyoming are also in the top five for sales tax rates.
Businesses in Maryland are required to pay various taxes, but which types of taxes depends on the type of business. Sales and use tax are taxes paid on merchandise that is sold or rented. Only one of these taxes is applicable to each transaction. Generally, use tax is charged for the rental of tangible goods or interstate sales, while sales tax is charged for local sales and some services.
One tradition of Maryland politics with which people might be unfamiliar is that the governor holds multiple bill-signing ceremonies following the adjournment of General Assembly's 90-day session, including one held the following morning after the final gavel sounds.
Sometimes, authorities impose a tax not just to raise revenue, but to attempt to control the public’s behavior toward a perceived public good. One common example is special taxes on cigarettes. Such taxes are usually intended to encourage smokers to quit, though they also tend to be revenue generators as well.
It appears that owners of restaurants, convenience stores and similar businesses in Philadelphia will soon have to begin collecting an extra sales tax on soda. The City Council there has passed a 1.5-cents-per-ounce tax on all drinks with added sugar or artificial sweetener that are sold in the city.
In 1992, the U.S. Supreme Court ruled that states can only impose sales taxes on businesses that have a physical presence in those states. Of course, that ruling came down years before internet retailing became possible.