Research Areas
Maryland
The Facts on Maryland's Tax Climate
Last updated July 1, 2009
Here are some basic facts on Maryland's tax system and how it compares to other states:
Tax Freedom Day Arrives on April 19 in Maryland
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2009, Maryland taxpayers had to work until April 19 (ranked 5th highest nationally) to pay their total tax bill, six days later than national Tax Freedom Day (April 13). Neighboring states' Tax Freedom Days are as follows: Delaware, April 11 (ranked 20th); Pennsylvania, April 14 (ranked 11th); West Virginia, April 1 (ranked 45th); and Virginia, April 16 (ranked 6th).
Full study of Tax Freedom Day, nationwide and in each state
Maryland's State/Local Tax Burden Fourth-Highest in Nation
Estimated at 10.8% of income, Maryland's state/local tax burden percentage ranks 4th highest nationally, well above the national average of 9.7%. Maryland taxpayers pay $5,669 per capita in state and local taxes.
Maryland's State-Local Tax Burden, 1977-Present
Other States' State/Local Tax Burdens
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2008
Maryland's 2010 Business Tax Climate Ranks 45th
Maryland ranks 45th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Delaware (8th), Pennsylvania (27th), West Virginia (37th) and Virginia (15th).
50-State Comparison of Business Tax Climates (data only)
2009 State Business Tax Climate Index, Sixth Edition (full study)
Maryland's Individual Income Tax System
Maryland's personal income tax system consists of eight separate brackets with a top rate of 6.25%, kicking in at an income level of $1,000,000. Among states levying an individual income tax, Maryland's top rate ranks 20th highest nationally. Maryland's 2006 individual income tax collections were $1,762 per person, which ranked 2nd highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita
Maryland's Corporate Income Tax System
Maryland's corporate tax structure consists of a flat rate of 8.25% on all corporate income. Among states levying corporate income taxes, Maryland's rate ranks 15th highest nationally. In 2007, state-level corporate tax collections (excluding local taxes) were $139 per capita, which ranked the state 30th highest nationally.
50-State Table of Corporate Income Tax Rates
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household
50-State Table of State Corporate Income Tax Collections Per Capita
Maryland Levies Sales Tax at National Median
Maryland levies a 6% general sales or use tax on consumers, at the national median. State and local governments combined collected approximately $605 per capita in sales taxes in 2006, which ranks 43rd highest nationally. Maryland's gasoline tax stands at 23.5 cents per gallon, which ranks 26th highest nationally. Maryland's cigarette tax stands at $2.00 per pack of twenty, ranking 9th highest nationally. The sales tax was adopted in 1947, the gasoline tax in 1922 and the cigarette tax in 1958.
50-State Table of Sales and Excise Tax Rates
50-State Table of State and Local General Sales Tax Collections Per Capita and Per Household
50-State Table of State and Local General Sales and Gross Receipts Tax Collections Per Household and Per Capita
Maryland Property Taxes Comparatively Modest
Maryland is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect far more. Maryland's localities collected $963.78 per capita in property taxes in fiscal year 2006, which is the latest year the Census Bureau published state-by-state property tax collections. At the state level, Maryland collected $103.18 during FY 2006, making its combined state/local property taxes $1,066.96 per capita, which ranks 26th highest nationally.
State property tax collections per capita by state
Federal Tax Burdens and Expenditures: Maryland is a Beneficiary State
Maryland taxpayers receive about more federal funding per dollar of federal taxes paid compared to the average state. Per dollar of federal tax collected in 2005, Maryland citizens received approximately $1.30 in the way of federal spending. This ranks the state 18th highest nationally and represents an increase from 1995, when Maryland received $1.27 per dollar of taxes in federal spending and also ranked 14th nationally. Neighboring states and what they received in federal spending per dollar of federal tax collected was: Delaware ($0.77), Pennsylvania ($1.07), West Virginia ($1.76), and Virginia ($1.51).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state
