Businesses in Maryland that fail to collect and remit sales tax face several severe consequences:

1. Fines and Penalties: Late Filing Penalty: Up to 10% of the tax due. Interest: Accrues on unpaid taxes from the original due date until full payment.

2. Audits and Increased Scrutiny: Non-compliant businesses may be subject to audits by the Maryland Comptroller’s office, leading to detailed examinations of financial records and operations.

3. Legal Actions:

   Persistent failure to remit sales tax can result in lawsuits to recover owed taxes.

   Severe non-compliance may lead to criminal charges for willful tax evasion, resulting in fines or imprisonment.

4. Revocation of Business Licenses: The Comptroller may revoke or suspend business licenses, preventing the business from legally operating in Maryland.

5. Impact on Credit Standing: Unpaid taxes and penalties can negatively affect the business’s credit rating, making it difficult to secure loans or credit in the future.

6. Liens and Asset Seizure: The state can place liens on the business’s property or seize assets to recover owed taxes.

7. Reputational Damage: Non-compliance can damage the business’s reputation, leading to loss of customer trust and reduced business opportunities.

To avoid these consequences, businesses must diligently collect and remit sales taxes, maintain accurate records, and ensure compliance with Maryland’s sales tax laws.