If you’re moving to the Old Line State or just trying to figure out why your paycheck looks a little light lately, you’ve probably realized that Maryland’s tax system is... a lot. It’s not just one number. Honestly, it’s a stack of different rates that depend on where you live, what you buy, and even how much your car weighs.
What is the tax rate in Maryland? Well, it's not a single figure. You’re looking at a 6% sales tax, a progressive state income tax that can hit 6.50% for high earners, and local piggyback taxes that add another 2.25% to 3.30% on top of that.
Let's break down the math so you aren't surprised when tax season rolls around.
The Income Tax Double-Whammy
Maryland is one of those states that lets its counties have a "piggyback" tax. This means you don't just pay the state; you pay the local government too. It’s all collected on one return, but the money goes to two different pockets.
The State Brackets
For the 2026 tax year, Maryland uses a progressive system. Basically, the more you make, the higher the percentage. If you're a single filer making under $100,000, your top state rate is 4.75%. But for the high flyers, things changed recently.
New brackets for 2026 look like this:
- 5.75% for income up to $250,000 (Single) or $300,000 (Joint).
- 6.25% for income between $250,001 and $500,000 (Single).
- 6.50% for anything over $1,000,000.
The County "Piggyback"
This is where it gets tricky. Every single county in Maryland, plus Baltimore City, sets its own rate. If you live in a place like Howard County or Baltimore City, you’re paying the maximum local rate of 3.20% or 3.30%.
✨ Don't miss: Online Associate's Degree in Business: What Most People Get Wrong
On the flip side, if you're out in Worcester County, you might only pay 2.25%.
You’ve gotta add these two together. So, if you live in Baltimore and fall into the middle-income bracket, your combined income tax rate is effectively around 8% or more. Kinda steep, right?
The 6% Sales Tax (And the Exceptions)
For most things—electronics, furniture, that new blender you don't need—the Maryland sales tax rate is a flat 6%.
There is no local sales tax. Unlike in Virginia or New York, where the city adds its own cut, in Maryland, 6% is 6% everywhere. But there are some weird specific rates for certain "vices" or luxury items:
- Alcohol: 9%
- Cannabis: 12%
- Vaping Liquid: 60% (Yes, you read that right. It's a huge jump meant to deter use).
- Short-term Car Rentals: 11.5%
What's exempt? Mostly the essentials. Most grocery store food isn't taxed. Neither are prescription meds or even some "Energy Star" appliances during specific holiday weekends. If you’re buying a car, though, you don’t pay sales tax—you pay a 6.5% titling tax instead.
Owning a Home: Property Taxes
Property tax in Maryland is handled at three levels: state, county, and municipal.
🔗 Read more: Wegmans Meat Seafood Theft: Why Ribeyes and Lobster Are Disappearing
The state rate is tiny—$0.112 per $100 of assessed value. The real "ouch" comes from the county. For 2026, many counties have adjusted their rates to keep up with inflation and school funding.
For example, in Anne Arundel County, the real property tax rate is roughly $0.977 per $100. If your house is assessed at $400,000, you’re looking at nearly $4,000 a year just in county taxes before you even look at city or state fees.
One thing you absolutely must check is the Homestead Tax Credit. It limits how much your assessment can go up each year for tax purposes. If your neighborhood suddenly becomes the new "it" spot and home values skyrocket, this credit stops your tax bill from doubling overnight.
The Cost of Driving
Maryland loves a good fee. If you own a car, you’ve probably noticed that registration isn't cheap anymore.
Since July 2025 and moving into 2026, the rates are based heavily on weight.
- Small cars (under 3,500 lbs): About $110.50 per year.
- Heavy SUVs/Trucks (over 3,700 lbs): These can run you $191.50 or more.
They also collect a surcharge for Emergency Medical Services (EMS) on every registration. Plus, the gas tax is indexed to inflation, so it ticks up a few cents almost every July. It’s currently hovering around $0.47 to $0.50 per gallon depending on the latest adjustment.
💡 You might also like: Modern Office Furniture Design: What Most People Get Wrong About Productivity
Death and Taxes: Inheritance
Maryland is unique—and not in a fun way. It is one of the only states that has both an estate tax and an inheritance tax.
- Estate Tax: This applies to the whole pile of money before it's given out. It only kicks in if the estate is worth more than $5 million.
- Inheritance Tax: This is a 10% tax on the person receiving the money.
The good news? Close relatives (spouse, children, parents, siblings) are usually exempt from the inheritance tax. But if you leave money to a cousin or a friend, the state is going to take a 10% cut of that gift.
Practical Steps to Lower Your Bill
If you’re feeling a bit overwhelmed by all these percentages, there are a few things you can actually do to keep more of your money.
First, max out your Maryland 529 plan if you have kids or grandkids. You can deduct up to $2,500 per beneficiary from your Maryland adjusted gross income. If you’re married and filing jointly, that’s $5,000. It’s one of the best ways to lower that state tax bill.
Second, check your local tax credits. Many counties offer "Senior Tax Credits" or "Individual Tax Credits" for low-to-moderate-income households that aren't automatically applied. You have to go to the Maryland Department of Assessments and Taxation (DAT) website and actually apply for them.
Finally, keep an eye on the Standard Deduction. For 2026, it’s been adjusted for inflation to $3,350 for singles and $6,700 for joint filers. If your itemized deductions (like mortgage interest and charity) don't beat those numbers, take the easy route and go standard. Just remember that if your income is over $200,000, Maryland starts "phasing out" your ability to use certain deductions, which is a sneaky way of raising the effective rate without changing the brackets.
The best way to stay ahead is to check your county's specific 2026 rate on the Comptroller of Maryland’s website, as local councils often vote on small changes late in the budget cycle.
Actionable Next Steps:
- Verify your county rate: Check the Maryland Comptroller’s "Local Income Tax" page to see if your county increased its rate for the current year.
- Apply for the Homestead Credit: If you just bought a home, you must file an application to lock in your assessment cap; it doesn't happen automatically.
- Review your withholding: If you’re a high-income earner, the new 2026 state brackets might mean you’re under-withholding. Use the Maryland Form MW507 to adjust your payroll taxes.