How to form a Maryland LLC
$100 filing, $300 annual report — and the personal property tax that makes Maryland expensive.
Contents 10 sections
aryland is one of the more expensive states to keep an LLC alive year after year. The filing fee is a reasonable $100, but the annual report fee is $300; the highest flat rate in the country outside of Delaware's $300 franchise/LLC tax; and Maryland is one of the few states that applies a personal property tax to business entities.
Overview
Work from the Maryland SDAT Business Express portal for current fees, forms, and filing status. Maryland's Comptroller's business tax page is the authoritative reference for post-formation tax registration, including the state's pass-through entity tax which Maryland LLCs can opt into for SALT-cap planning.
File through the Maryland Business Express portal at egov.maryland.gov/businessexpress.
Filing fee and formation
- LLC filing fee: $100 (standard) / $150 (expedited same-day / 7-day)
- Form: Articles of Organization, filed with the State Department of Assessments and Taxation (SDAT)
- Processing: Standard ~7 weeks; 7-day expedited $50 upcharge; same-day $150 total
- Name rules: Must contain "Limited Liability Company" or "L.L.C."
Maryland's SDAT has historically run one of the slowest standard queues in the country; pay for expedited unless you have no time pressure.
Maryland's $300 annual report plus personal property return is one of the highest recurring costs on the East Coast. That carry cost is the reason most out-of-state founders skip Maryland even when they have Maryland customers.
Resident agent
Every Maryland LLC needs a resident agent with a physical street address in Maryland. The agent can be an individual Maryland resident or a qualified business entity. P.O. boxes are not allowed.
Annual report; and the personal property tax
Flag for editors: Maryland's personal property tax on entities is unusual and meaningfully changes the cost of keeping a Maryland LLC.
Maryland's annual filing is actually two combined obligations:
- Annual Report (Form 1); $300 flat fee, due April 15 each year. Every LLC files this regardless of activity or revenue.
- Business Personal Property Return; filed on the same form. If the LLC owns personal property (equipment, furniture, inventory, vehicles, supplies) used in Maryland, the LLC owes a county- and municipality-level tax on the assessed value. Rates vary by jurisdiction (Baltimore City, Baltimore County, Montgomery County, etc.); typical effective rates are 2–3% of assessed value per year.
Key nuance: even LLCs with no personal property must still file the Form 1 and pay the $300 annual fee. The personal property tax return is a component of the annual filing, not a separate one.
An LLC that is a pure holding company (no furniture, no equipment, no inventory in Maryland) can check the "no personal property" box and owes only the $300. Operating businesses with equipment will owe substantially more.
Taxation
- Corporate income tax: 8.25% flat
- LLC default pass-through: To members' Maryland personal income tax (graduated, top 5.75%) plus local add-on (2.25–3.2%)
- Sales tax: 6% state, no local add-on
- Personal property tax: Via the annual report (see above)
- No franchise tax (the personal property tax effectively takes its place)
Three things founders miss
- $300 annual report applies to every LLC. No revenue floor, no activity threshold; if you formed a Maryland LLC, it owes $300 on April 15 until dissolved. Inactive shell LLCs can drain cash quickly.
- Personal property tax is real. Restaurants, retail, and any inventory-heavy business should model this explicitly. A $50,000 equipment base in Baltimore County can add ~$1,250/year.
- Forfeiture comes fast. SDAT will forfeit your good standing for missing the annual report; a forfeited LLC cannot sue in Maryland courts or enforce contracts until reinstated (and pays back fees + penalties).
Filing checklist
- Reserve name (optional, $25, 30 days)
- File Articles of Organization ($100 standard / $150 expedited)
- Appoint Maryland resident agent
- Obtain EIN from IRS
- Register with Comptroller of Maryland for sales/use tax if applicable
- Calendar April 15 annual report + personal property return ($300 + any PPT)
- Budget for county-level personal property tax if holding equipment or inventory
Sources
- Maryland Business Express; egov.maryland.gov/businessexpress
- State Department of Assessments and Taxation (SDAT)
- Maryland Limited Liability Company Act, Md. Corps. & Assns. §§ 4A-101 et seq.
- Comptroller of Maryland; business taxes
Post-formation: the first-year checklist
Formation is step one. The obligations that actually generate state and federal trouble if missed sit in the first twelve months after the Articles clear. Plan for:
- EIN. Apply at the IRS EIN portal. Free, instant if you have a US SSN or ITIN.
- Operating agreement. Not filed with the state, but every state presumes one exists for dispute resolution. A single-member LLC still benefits from a written one; banks routinely ask for it when opening a business account.
- Business bank account. Opens only after the state filing clears and the EIN is issued. Commingling personal and business funds is the fastest way to expose yourself to a piercing-the-corporate-veil argument; the SBA's guide to business structures covers the basics of why separation matters.
- BOI report. The FinCEN Beneficial Ownership Information reporting regime requires most new LLCs to report beneficial owners within 30 days of formation. Penalties are serious; the filing is free.
- State tax registration. Sales tax, withholding, unemployment insurance: each is a separate account in most states. Register early so you are not back-filing returns.
Additional primary sources
- Maryland SDAT Business Express: https://egov.maryland.gov/BusinessExpress
- Maryland Comptroller, business taxes: https://www.marylandtaxes.gov/business/index.php
- IRS LLC classification: https://www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc