A physical nexus in Maryland is established when a business has a tangible presence within the state. This includes:

• Owning or Leasing Property: Such as offices, warehouses, retail stores, or any real estate.

• Employing Personnel: Having employees or representatives conducting business activities in Maryland.

• Inventory Storage: Storing goods in Maryland warehouses, including third-party logistics providers.

• Pop-Up Shops and Temporary Kiosks: Operating temporary sales locations or participating in tradeshows regularly.

• Remote Workers: Employees working remotely from Maryland residences.

Impact on Sales Tax Responsibilities:

• Registration: Businesses with physical nexus must register for a Maryland sales tax permit.

• Tax Collection: They are required to collect Maryland’s 6% sales tax on taxable sales to Maryland customers.

• Remittance: Remit the collected sales tax to the state by the designated deadlines.

• Compliance: Adhere to regular filing requirements and maintain accurate sales records.

Having a physical nexus obligates businesses to fully comply with Maryland’s sales tax laws, ensuring they contribute appropriately to state revenue through tax collection and remittance.