Taxes / State tax rules / Maryland
Selling on eBay, Poshmark or Etsy from Maryland: sales tax and 1099-K rules
Since October 1, 2019, Maryland's Tax-General § 11-403.1 has required a marketplace facilitator to collect the sales and use tax on a marketplace seller's retail sale to a buyer in Maryland, the buyer pays the tax to the facilitator, and the seller isn't required to collect it to the extent the facilitator does. For Form 1099-K, Maryland has its own test: Tax-General § 10-825 has a third-party settlement organization report payments to the Comptroller and to a payee who must file a Maryland income tax return or declaration when they meet or exceed the IRC § 6041(a) filing threshold, the Form 1099-MISC limit, instead of the federal 1099-K test; the statute names no dollar figure.
General information, not tax advice. Check with a tax professional about your own situation.
Checked against the official pages listed below on .
Maryland in short
- General sales tax:
- Yes, 6% state rate
- Marketplace facilitator law:
- Yes: Md. Code, Tax-General § 11-403.1 (Chapter 735 of 2019, House Bill 1301), since Oct 1, 2019
- Form 1099-K:
- State threshold: reportable payment transactions to a payee that meet or exceed the filing threshold under § 6041(a) of the Internal Revenue Code (no dollar figure in the statute), for a payee required to file a Maryland return or declaration
Who collects the tax on a marketplace sale
The marketplace facilitator collects the sales and use tax due on a marketplace seller's retail sale or sale for use to a buyer in Maryland, the buyer pays the tax to the facilitator at the time of sale, and the facilitator reports it separately from the tax on its own direct sales (§ 11-403.1(a), (b) and (d)). Section 11-403.1 itself sets no sales threshold for facilitators; the Comptroller's facilitator regulations weren't read for this check.
If you sell only through marketplaces
Under § 11-403.1(a)(2), a marketplace seller isn't required to collect the tax to the extent the facilitator collects it, and § 11-101's definition of vendor includes a person that engages in the business of a marketplace seller. The Comptroller's guidance pages need JavaScript and couldn't be read for this check, so this page doesn't say whether a Maryland seller who sells only through marketplaces needs its own license.
Registration, resale certificates and what changes when you also sell direct have their own page: Maryland: seller's permit and resale certificate rules.
The law: Md. Code, Tax-General § 11-403.1 (Chapter 735 of 2019, House Bill 1301), effective .
"A marketplace facilitator shall collect the applicable sales and use tax due on a retail sale or sale for use by a marketplace seller to a buyer in this State."
"A marketplace seller is not required to collect the applicable sales and use tax under paragraph (1) of this subsection to the extent that the marketplace facilitator collects the applicable sales and use tax."
"The person’s gross revenue from the sale of tangible personal property, digital codes, digital products, or taxable services delivered in the State exceeds $100,000"
Sources: Statutes Text: Article - Tax - General, § 11-403.1; Statutes Text: Article - Tax - General, § 11-101; HB1301 (2019 Regular Session): Taxation of Online Sales - Marketplace Facilitators and Sellers of Other Tobacco Products; Senate Bill 728 (2019), enrolled; COMAR 03.06.01.33 Out-of-State Vendor.
Maryland's sales tax
Maryland's sales and use tax is 6 cents for each exact dollar of a taxable price, with a cent-by-cent bracket for the rest of a dollar and for prices under $1 (Tax-General § 11-104(a)); the section has special rules for some sales, such as vending machine sales and short-term vehicle rentals.
"6 cents for each exact dollar"
Form 1099-K: Maryland and the federal test
Tax-General § 10-825, added by Chapter 538 of 2020 (Senate Bill 192), has a third-party settlement organization report the gross amount of reportable payment transactions to the Comptroller and to a payee required to file a return or declaration under Part II of Subtitle 8 of the income tax title when the amount meets or exceeds the § 6041(a) filing threshold, notwithstanding the federal § 6050W threshold, at least 30 days before the federal filing deadlines. The statute names no dollar figure: the Department of Legislative Services' 2020 fiscal note said the provision adopted the $600 threshold federal law then set for Form 1099-MISC, and the IRS's 1099-MISC and 1099-NEC instructions say that minimum increased to $2,000 for tax years beginning after 2025, so ask the Comptroller which figure applies to a given payment year. The Comptroller's 2025 instructions for reporting 1099s say § 10-825 requires 1099-K forms for those payees.
| Test | Dollar amount | Transactions | Wording |
|---|---|---|---|
| Maryland | The § 6041(a) amount | No count | reportable payment transactions to a payee that meet or exceed the filing threshold under § 6041(a) of the Internal Revenue Code (no dollar figure in the statute), for a payee required to file a Maryland return or declaration |
| Federal (IRS) | Over $20,000 | More than 200 | Over $20,000 in more than 200 transactions, through one app or marketplace in a calendar year |
"Notwithstanding the filing threshold under § 6050W of the Internal Revenue Code, a third–party settlement organization shall report to the Comptroller and a participating payee"
"if the amount of reportable payment transactions meets or exceeds the filing threshold under § 6041(a) of the Internal Revenue Code"
"Section 10-825 of the Maryland Tax-General Article requires that 1099-K forms are required for payees"
"This provision adopts the payment threshold of $600 required under federal law under form 1099-MISC"
Rule: Md. Code, Tax-General § 10-825 (Chapter 538 of 2020, Senate Bill 192).
The federal test, for comparison: the IRS says a payment app or online marketplace must send a Form 1099-K when payments for goods or services total over $20,000 in more than 200 transactions, and adds: "However, they may send you a Form 1099-K with lower amounts and/or transactions." (Understanding your Form 1099-K, reviewed ). The Instructions for Form 1099-K count both parts for the calendar year, through each platform separately, and say the box 1a gross amount is figured without adjustments for credits, discounts, fees, refunds or shipping, so a 1099-K figure is not the same as profit. More on the federal rule in Form 1099-K for resellers.
Sources: Tax-General § 10-825; Chapter 538 of 2020 (Senate Bill 192, Budget Reconciliation and Financing Act of 2020); Fiscal and Policy Note, Senate Bill 192 (2020 Session); 2025 Maryland Employer Reporting of 1099s Instructions and Specifications; Instructions for Forms 1099-MISC and 1099-NEC (Rev. 12/2026).
Worked examples
Tax on a $40 marketplace sale to a Maryland buyer
At 6 cents for each exact dollar, a $40.00 taxable item carries $2.40 of sales and use tax, which the buyer pays to the marketplace facilitator and the facilitator sends to the Comptroller.
A returned item
If that buyer returns the $40.00 item and the price is fully refunded, § 11-403.1(c) has the facilitator, or other appropriate party, refund the proportionate tax: all $2.40.
A remote seller's own sales
A seller outside Maryland with $120,000 of its own sales delivered into Maryland in 2025 is over the $100,000 gross revenue figure in the Comptroller's regulation for out-of-state vendors (COMAR 03.06.01.33), which also counts 200 or more separate transactions.
$1,500 paid to a Maryland seller on one platform in 2026
$1,500 in 80 transactions is far below the federal 1099-K test (over $20,000 in more than 200 transactions). Under § 10-825 the test is the § 6041(a) filing threshold instead: $1,500 is over the $600 the 2020 fiscal note gave for it but under the $2,000 the IRS gives for tax years beginning after 2025, so which figure Maryland applies to 2026 payments decides whether the platform reports it. At $2,500, both figures are met.
Edge cases and details
- A facilitator isn't liable for failing to collect the right amount if it shows the Comptroller the failure came from insufficient or incorrect information from the seller, unless the two are related entities (§ 11-403.1(f)).
- If the Comptroller audits for compliance with § 11-403.1, it may audit only the marketplace facilitator for facilitated sales, and may not audit the marketplace seller for facilitated sales on which the facilitator collected or should have collected the tax (§ 11-403.1(i)).
- A facilitator and seller may apply for a waiver of the facilitator's collection duty only in narrow cases: the seller is a publicly traded communications company (or controlled by one), agrees to collect and remit all the tax itself, and shows it holds a Maryland license (§ 11-403.1(h)).
- A class action can't be brought in a Maryland court against a facilitator on behalf of buyers over tax overpaid on facilitated sales; buyers keep their own refund rights (§ 11-403.1(e)).
- If a facilitator fails to collect, the buyer still owes the tax on the taxable sale (§ 11-403.1(g)).
- The Comptroller's regulation COMAR 03.06.01.33 treats a person selling for delivery in Maryland as an out-of-state vendor, required to collect, if in the previous or current calendar year its Maryland gross revenue exceeds $100,000 or it makes 200 or more separate transactions, effective from October 1, 2018. The statute doesn't say how that test applies to a seller whose sales all go through facilitators.
- Section 10-825(c) has the platform report to the Comptroller and the payee at least 30 days before the federal filing deadlines, not after them.
What to do
- Keep each marketplace's sales report showing the Maryland tax it collected on your sales.
- If you also sell direct to Maryland buyers, check with the Comptroller or a tax professional about a license for those sales; § 11-403.1 covers sales made through a marketplace facilitator.
- If you file a Maryland income tax return, a platform may report your payments to the Comptroller well below the federal test; compare any 1099-K with the platform's sales report and check with a tax professional about how it fits your returns.
Common questions
Does the marketplace collect Maryland sales tax for me?
Yes, on sales through it: Tax-General § 11-403.1(a) requires a marketplace facilitator to collect the sales and use tax on a marketplace seller's retail sale to a buyer in Maryland, and says the seller isn't required to collect it to the extent the facilitator does.
What is Maryland's 1099-K threshold?
Tax-General § 10-825 replaces the federal 1099-K test with the filing threshold of IRC § 6041(a), the Form 1099-MISC limit, for payees who must file a Maryland income tax return or declaration, and names no dollar figure. The Department of Legislative Services' 2020 fiscal note put that threshold at $600, and the IRS says it increased to $2,000 for tax years beginning after 2025; ask the Comptroller which figure applies to a given payment year.
When did Maryland's marketplace facilitator law take effect?
October 1, 2019. The General Assembly's record for House Bill 1301 (2019), enacted as Chapter 735, lists effective dates of October 1, 2019 and July 1, 2020, and the enrolled cross-filed bill (Senate Bill 728) says the act takes effect October 1, 2019.
What is Maryland's sales tax rate?
6 cents for each exact dollar of a taxable price, with a bracket for amounts under a dollar (Tax-General § 11-104(a)); the section has special rules for some sales.
Related
- Every state on one table: sales tax, marketplace facilitator laws and 1099-K rules
- Maryland: seller's permit and resale certificate rules
- Maine: sales tax and 1099-K rules
- Massachusetts: sales tax and 1099-K rules
- Form 1099-K for resellers: the federal test
- Do eBay's fees apply to the sales tax a buyer pays?
- Where each selling app keeps its sales report
General information, not tax advice
This page summarizes Maryland's own published pages and statutes as read on , and the IRS's 1099-K pages. It doesn't say what you should file, register for or pay. Rules depend on your situation and change: check with a tax professional, or with the state's revenue department.
Sources
Official pages this page is built from, with the day each was read.
- Maryland General Assembly: Statutes Text: Article - Tax - General, § 11-403.1; read . Facilitator collects; seller not required to collect to that extent; buyer pays facilitator; refunds; separate reporting; class action bar; liability relief; waiver; buyer's obligation; audits of facilitated sales.
- Maryland General Assembly: Statutes Text: Article - Tax - General, § 11-101; read . Definitions of marketplace facilitator and marketplace seller; vendor includes both.
- Maryland General Assembly: Statutes Text: Article - Tax - General, § 11-104; read . Sales and use tax rate: 6 cents for each exact dollar, bracket schedule, other rates.
- Maryland General Assembly: HB1301 (2019 Regular Session): Taxation of Online Sales - Marketplace Facilitators and Sellers of Other Tobacco Products; read . Enacted under Article II, Section 17(c) of the Maryland Constitution as Chapter 735; effective dates October 1, 2019 and July 1, 2020.
- Maryland General Assembly: Senate Bill 728 (2019), enrolled; read . Cross-filed bill text: the act takes effect October 1, 2019 and applies only prospectively.
- Maryland Division of State Documents (Code of Maryland Regulations): COMAR 03.06.01.33 Out-of-State Vendor; read . Out-of-state vendor test: Maryland gross revenue over $100,000 or 200 or more transactions in the previous or current calendar year, effective October 1, 2018.
- Maryland General Assembly: Tax-General § 10-825; read . Third-party settlement organizations report to the Comptroller and to payees required to file a Maryland return or declaration when payments meet or exceed the § 6041(a) filing threshold, notwithstanding § 6050W; due at least 30 days before the federal deadlines.
- Maryland General Assembly: Chapter 538 of 2020 (Senate Bill 192, Budget Reconciliation and Financing Act of 2020); read . Adds Tax-General § 10-825.
- Department of Legislative Services, Maryland General Assembly: Fiscal and Policy Note, Senate Bill 192 (2020 Session); read . The 1099-K provision adopted the $600 threshold that federal law then set for Form 1099-MISC.
- Comptroller of Maryland: 2025 Maryland Employer Reporting of 1099s Instructions and Specifications; read . Section 10-825 requires 1099-K forms for payees required to file a return or declaration under Part II of Subtitle 8; 1099-K filed electronically by SFTP (October 2025 edition).
- IRS: Instructions for Forms 1099-MISC and 1099-NEC (Rev. 12/2026), dated ; read . Information return threshold increased to $2,000 for tax years beginning after 2025, inflation adjustment from 2027.
- IRS: Understanding your Form 1099-K, reviewed . The federal 1099-K test.
- IRS: Instructions for Form 1099-K, reviewed . Both parts of the federal test counted for the calendar year.
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