Technical Bulletins/Administrative Releases

The Comptroller’s Office is committed to providing taxpayers with clear and accurate guidance on Maryland tax law and procedures. To that end, Administrative Releases are becoming Technical Bulletins.

Technical Bulletins (TBs) offer technical guidance on a specific topic. For complex topics that have evolved over time, Technical Bulletins may include legislative and regulatory history as well as legal citations, serving as a reference tools for taxpayers and tax practitioners. Technical Bulletins will retain their original title number whenever possible. For example, former Administrative Release 6, Taxation of Pass-Through Entities, is now Technical Bulletin 6, Taxation of Pass-Through Entities.


Release # Title Revision/Effective Date
1 Military Personnel and Civilian Spouses - Both Residents and Nonresidents of Maryland Revised: 9/2011
2 Interstate Commerce Tax Act. Domestic and Foreign Corporations. Nexus Requirements. Apportionment of Corporate Net Income Revised: 9/2009
3  Nonresident Credits, Reciprocal Income Tax Agreements, Nonresident County Income Tax, and Nonresident with Maryland Resident Spouse Revised: 9/2011
4 Extension of Time for Filing Maryland Income Tax Returns and Estate Tax Returns Revised: 9/2011
5 Mutual Fund Distributions of Tax-Exempt Interest and Capital Gains from State and Local Obligations Revised: 9/2009
6 Taxation of Pass-Through Entities Revised: 12/2023
7 Some Aspects of the Subtraction Modification for Volunteer Travel Expenses Under Section 10-208 of the Tax-General Article. See Form 502V Revised: 9/2009
8 Treatment of Partner's Share of Income, Gain or Loss, from a Partnership When the Individual Partner Establishes or Abandons Maryland Residence Revised: 9/2008
9 Portion of Subpart F Income which may be subtracted from Corporation Taxable Income Effective: 9/2009
10 Maryland Taxation of Income from "Ginnie Maes" Effective: 9/2009
11 Income from Regulated Investment Companies which Invest in U.S. Government Obligations and Income from Repurchase Agreement Transactions Revised: 9/2009
12 Apportionment of Partnership Share of Income by Corporate Partners Revised: 9/2008
13 Tax Status of Interest Received from Federal, State and Local Obligations Revised: 8/2012
14 Interest Rates for Refunds and Delinquent Taxes Revised: 11/2019
15 Information Reporting on Sales of Real Estate Located in Maryland and Owned by Nonresidents Revised: 09/2007
16 Fiduciaries, Including Estates and Trusts Revised: 9/2011
17 Rescinded Rescinded: 12/31/2001
18 Net Operating Losses and Associated Maryland Addition and Subtraction Modifications Revised: 07/2013
19 Rescinded Rescinded: 08/31/2005
20 Income Tax Refunds and Credits: Limitations Revised: 9/2009
21 Income Tax Treatment of Employee Contributions under the Maryland Pension Pickup Program Revised: 9/2010
22 Apportionment of Income - Airlines Revised: 6/2022
23 Military Retirement Income Revised: 9/2009
24 Nonresident Professional Athletes and Entertainers Revised: 9/2008
25 Income Tax Treatment of Limited Liability Companies Revised: 9/2012
26 Procedures for Computer-Printed Substitute Forms Revised: 09/2022
27 Work, Not Welfare, Tax Incentive Act of 1995 with 1996, 1998, 2000, 2003, 2006, 2007 and 2008 Amendments (Employment Opportunity Credit) Revised: 9/2012
28 Rescinded Rescinded: 08/31/2005
29 Subtraction Modification for Volunteer Fire, Rescue or Emergency Medical Services Personnel Revised: 6/2011
30 Maryland Estate Tax Revised: 05/2013
31 Subtraction Modification for Police Auxiliary or Reserve Volunteers Revised: 9/2009
32 Maryland College Savings Plans Tax Benefits Revised: 01/2010
33 Tax Credits for Hiring Individuals with Disabilities Revised: 8/2012
34 Credit against Withholding Taxes for Tax-exempt Organizations Revised: 9/2010
35 Subtraction Modification for United States Coast Guard Auxiliary Members Revised: 9/2009
36 Tax Credit for Cost of Providing Commuter Benefits to Employees and the Commuter Benefits Act of 2000 and 2002 Revised: 9/2009
37 Domicile and Residency Effective: 9/2009
38 Decoupling from Federal Income Tax Laws Revised: 6/2022
39 Long-Term Employment of Qualified Ex-Felons Tax Credit Revised: 8/2012
40 Claim of Right Effective: 9/30/2006
41 Withholding on Designated Distributions from Retirement Plans Revised: 8/2012
42 502CR Part A - Claiming Credit for State and Local Taxes Paid to Other States Revised: 3/2019
43 Corporate Apportionment of Income Revised: 10/2022.
Number Title Revision/Effective Date
TB-46 Home Amenity Sales and Use Tax Effective: 7/1/2024
Number Title
TT-1 Cigarette Sales Below Cost Act - Meeting "Cash and Carry" Competition
TT-2 Cigarette Tax Securities
TT-3 Requirements for Renewal of License
TT-4 Promotional Allowances and Cigarette "Buydowns"
TT-5 Cigarette Sales Below Cost Act - Minimum Price Markups/Internet Price Calculator
TT-6 Maryland Cigarette Sales Below Cost Act Minimum Price Calculation
TT-7 Requiring Remittance of Tobacco Taxes in Excess of $10,000 by Immediately Available Funds.
TT-8 Cigarette Tax Assessments
TT-9 Clove Cigarettes
TT-10 Registration Requirement for Certain Retailers of Other Tobacco Products
TT-11 Retail Cigarette License Renewals
TT-12 Fire Safety Performance Standard for Cigarettes
TT-13 Other Tobacco Products (OTP) Retailers Frequently Asked Questions
Number Title
AB-1 Restrictions on Importation of Alcoholic Beverages
AB-2 Destruction of Distressed Product
AB-3 Rental of Refrigerated Trucks to Retail Licensees
AB-4 (obsolete)
AB-5 Wholesaler to Retailer Credit Sales of Beer Products (Worcester County)
AB-6 Deliveries of Wine and Distilled Spirits to Retailers (obsolete)
AB-7 Alcoholic Beverages Trade Practices - Questions and Answers
AB-8 Relationship of Solicitors to Retail Licensees and Consumers
AB-9 Returned Goods (obsolete)
AB-10 Beer Discounts and Depletion Allowances (obsolete)
AB-11 Private Labels and limited Availablility Products
AB-12 Samples of Alcoholic Beverages
AB-13 "Private Label" Beer
AB-14 Trade Practices - Radio Station Promotions
AB-15 Catering Activities in Montgomery County, Maryland
AB-16 Alcoholic Beverage Coupons
AB-17 Returned Goods
AB-18 Beer Discounts and Depletion Allowances
AB-19 Personalized Advertising Signs
AB-20 Advertising and Promotional Contracts Related to Retail License Premises
AB-21 Direct Wine Seller's Permit - Procedures and Responsibilities (obsolete)
AB-22 Retail License Requirements and Restrictions
AB-23 Direct Wine Seller's Permit - Procedures and Responsibilities (obsolete)
AB-24 Wholesalers of Malt Beverage Products
AB-25 Regulation 03.02.01.04 - Credit Control
AB-26 Statewide Caterer's License (SCAT License)
AB-27 Requiring Remittance of Alcoholic Beverages Taxes in Excess of $10,000 by Immediately Available Funds.
AB-28 Beer Packaging Containing Multiple Container Sizes
AB-29 Discriminatory Pricing of Alcoholic Beverages
AB-30 Alcohol Awareness Training
AB-31 2005 Legislative Session - Pomace Brandy
AB-32 Subject: U.S. Supreme Court Decision on Direct Shipping of Wine
AB-33 Limited Winery License Authority (obsolete)
AB-34 Limited Winery License Authority (obsolete)
AB-35 Samples of Alcoholic Beverages - Retail Licensees
AB-36 Price Filings - Class "A" Amended Schedules for Wines and Distilled Spirits
AB-37 Keg Beer Deposits
AB-38 Worcester County Beer Credit Control
AB-39 Shelf Management and Stocking of Alcoholic Beverages
AB-40 Sale of Wine to Persons Attending Scheduled Promotional Events or Other Organized Activities at the Licensed Premise
AB-41 Price Postings and Volume Discounts
AB-42 Direct Wine Shipper's Permit
Number Title
TB-44 Technical Bulletin 44: Private Letter Rulings
TB-45 Technical Bulletin 45: Whistleblower Reward Program
TB-50 Technical Bulletin 50: Restaurant Licenses and Trader's Licenses
Number Title
TB-49 Advertising Signage Requirements for Retail Motor Fuel Service Stations

Motor Fuel Tax Publications 1997 – 2013

How to Avoid ERRORS on the IFTA-100 and IFTA-101 Quarterly Tax Report Forms
  1. Use the pre-printed report and schedules that are mailed to each licensee.
  2. When travel is in more than one jurisdiction, the computed taxable gallons used (column K) will never exactly equal the tax paid gallons purchased (column L) on any jurisdiction line. It must be either net taxable gallons or net credit gallons in column M, but not zero; likewise for the amount(s) due in column O and Q.
  3. When there are two lines pre-printed for a jurisdiction (which indicates a surcharge jurisdiction) and when travel occurred in that jurisdiction, there will always be tax due on the surcharge line (second line), because there cannot be tax paid gallons (column L) on a surcharge line.
  4. Use brackets to signify a credit when there is a credit in column M, O, or Q on IFTA-101; or lines 1-6, line 8, or line 10 on IFTA-100.
  5. There will be either a total due or credit in column Q for every jurisdiction in which travel occurs.
  6. Transfer the net total due (or credit) in column Q from each form IFTA-101 (separate form required for each fuel type) to the appropriate fuel type line on form IFTA-100.
  7. Do not use decimals when entering miles or gallons on form IFTA-101; round miles or gallons to the nearest whole number.
  8. Do not enter dollars/cents amounts in column L (tax paid gallons). Enter only gallon amounts.

TO: All Maryland Volunteer Fire and
Nonprofit Volunteer Rescue Companies

SUBJECT: State Gasoline and Diesel Refund and Diesel Tax Exemption Certificate Requirements

Volunteer fire and nonprofit volunteer rescue companies are eligible for a refund of gasoline and diesel taxes or a diesel tax exemption certificate for fuel used to operate fire or rescue apparatus or vehicles.

This administrative release is being provided to all Maryland volunteer fire and nonprofit volunteer rescue companies to answer questions about the state refund and exemption certificate requirements.

What requirements must volunteer fire or nonprofit volunteer rescue companies meet to be eligible for a refund of gasoline and diesel taxes or a diesel tax exemption certificate? A volunteer fire or nonprofit volunteer rescue company must:

  1. File articles of incorporation with the Maryland Department of Assessments and Taxation as a volunteer organization;
  2. Have a federal identification number assigned to the legal corporate name; and
  3. Include volunteer personnel in the operation of fire or rescue apparatus or vehicles.

Are all fire and rescue companies entitled to a refund of gasoline and diesel taxes or a diesel tax exemption certificate?

No. If the fire or rescue apparatus or vehicles are operated exclusively by paid personnel, no refund or exemption is authorized.

How can qualified volunteer fire and nonprofit volunteer rescue companies buy diesel fuel without paying the state motor fuel tax?

If the company buys diesel fuel in bulk from a fuel supplier, or if the diesel fuel is acquired directly from a county or municipal fuel facility that has tax-free diesel available, the fire or rescue company needs a state-issued tax exemption certificate to obtain tax-free diesel fuel. Qualified organizations may also apply for a refund of any diesel taxes paid.

May qualified volunteer fire and nonprofit volunteer rescue companies buy gasoline without paying the state motor fuel tax?

No. Gasoline can only be acquired tax paid. Qualified organizations may apply for a refund of the gasoline taxes paid.

Can motor fuel be purchased from any retail service station without paying the state motor fuel tax?

No. If gasoline or diesel fuel is acquired directly from a retail service station, the state motor fuel tax is automatically paid. Qualified entities may apply for a refund.

How can a company get a diesel tax exemption certificate?

Anyone eligible for a diesel tax exemption certificate must complete the Special Fuel Tax Exemption Certificate Application (COT/MFT-047), submit the form to the Motor Fuel Tax Bureau, and renew the certificate by May 10th of each year. Failure to renew may result in the cancellation of the exemption certificate, and subsequent purchases become tax paid. You may obtain additional information on eligibility and exemption certificates by contacting the Licensing and Registration section at (410) 260-7215.

How is a refund of the state gasoline and diesel tax obtained?

You may contact the Taxpayer Accounting/Refund Unit at (410) 260-7921 for further information and a refund packet.

TO: Maryland State Police, Maryland Transportation Authority Police and Maryland Motor Carrier Enforcement Officers

FROM: Richard A. Carey, Director, Motor Fuel Tax Bureau

SUBJECT: Motor Carrier Decals

DATE: February 27, 2002

International Fuel Tax Agreement (IFTA) Decals:

  • The annual IFTA 2-month credentials grace period will expire at midnight on Thursday, February 28, 2002.
  • Beginning March 1, 2002, valid 2002 IFTA decals and an IFTA license must be displayed on all interstate qualifying vehicles. Citations should then be issued for failure to display proper IFTA credentials on interstate vehicles.

Maryland Non-IFTA Intrastate Motor Carriers:


  • Qualifying vehicles that display Maryland tags and travel 100 percent within Maryland are not required to display a Maryland non-IFTA decal or cab card and should not be issued citations.
  • Qualifying vehicles that do not display Maryland tags should be issued citations when they do not display valid 2002 IFTA decals and IFTA license when traveling in Maryland.

Questions may be directed to the Motor Fuel Tax Bureau at 410-260-7215.

Cost of Collection Discount

Senate Bill 323, The Budget Reconciliation and Financing Act of 2002 was passed by the Maryland General Assembly and signed by the Governor as Chapter 440, on May 16, 2002. The Comptroller of Maryland will be implementing the bill as of July 1, 2002 affecting changes in the amount of discount taken on the monthly returns of Licensed Dealers and Special Fuel Sellers. This discount, as authorized in Maryland Tax General Article 9-315, is to reimburse the licensed dealer or licensed special fuel seller for expenses incurred for the State in:

  • keeping records;
  • collecting and paying the tax; and
  • preparing reports

The new rate will be computed at ½ of 1% on the first 10 cents of the motor fuel tax on each gallon of motor fuel. This rate will be one-half of the old rate. The rates for the allocations on sales, which you make to the identified customers, will not change.

The new rate will be used when you file your July 2002 return, which will be due September 3, 2002.

If you have any questions you may call the Motor Fuel Tax Bureau at (410) 260-7131, or e-mail to mft@marylandtaxes.gov.

Distribution: Dealers and Special Fuel Sellers

Important IFTA Renewal Notice
The Comptroller of Maryland's Motor Fuel Tax Bureau is pleased to announce new procedures for automatically renewing International Fuel Tax Agreement (IFTA) licenses and issuing decals for the 2003 registration year.

During the last week of November 2002, we will check our files to identify licensees with no outstanding returns or unpaid assessments. If you qualify, we will automatically send your 2003 decals to you beginning the first week of December. We will send you the same number of decals for 2003 that were active at the end of November 2002. If you no longer operate vehicles for which 2002 decals were obtained, please contact our office to cancel those decals.

Additional decals may be requested after the renewals are processed.

You will not qualify for the automatic renewal if our files show an outstanding return or unpaid assessments as of the end of November. In that case, you will receive a renewal application in the mail as in previous years. If your account is in a cancelled or revoked status at that time, you will have to contact our office for information on restoring your account to active status, prior to applying for 2003 decals.

As soon as you get your decals for 2003, you may put them on your vehicle. After February 28, 2003, qualified vehicles must display current decals or the operator may be subject to a fine.

In addition, this year we will not be mailing copies of the IFTA Compliance Manual to renewing licensees. We will have an updated version of the manual online for review by chapter or as a printer-friendly (.pdf) version.

We will also have available upon request the manual in book form and on diskette.

This is your opportunity to make any adjustments to your license (address, phone number, contact person, pay your assessment, etc) prior to the end of November. We have tried to make this process as easy as possible for all concerned, and would appreciate any comments or questions. For more information, please contact the Motor Fuel Tax Bureau at (410)-260-7215 or by e-mail at mft@marylandtaxes.gov.

TO: Maryland State Police, Mass Transit Authority Police and other Maryland Motor Carrier Enforcement Officers

FROM: Richard A. Carey, Director, Motor Fuel Tax Bureau

SUBJECT: IFTA Credential Grace Period

DATE: November 22, 2002

The 2003 IFTA decals and license are valid for carriers to display beginning December 1, 2002. Also, there is a two-month grace period from January 2003 through February 2003 for displaying new 2003 decals and licenses.

Accordingly, interstate carriers must display one of the following for each vehicle to be valid during December 2002, January 2003 and February 2003 when traveling in Maryland:

  • A valid 2002 IFTA license and two 2002 IFTA decals issued by an IFTA jurisdiction.
  • A valid 2003 IFTA license and two 2003 IFTA decals issued by any IFTA jurisdiction.
  • A valid Maryland 15-day trip permit.

Citations should only be issued during December, 2002, January 2003 and February 2003 when interstate carriers properly display none of the aforementioned credentials.

Beginning March 1, 2003, if an interstate carrier does not have a valid trip permit, a citation should be issued when a 2003 IFTA license and two 2003 decals are not properly displayed on each vehicle.

Qualifying vehicles that travel 100 percent in Maryland are exempt from these credentialing requirements only if they are tagged in Maryland.

Questions may be directed to the Motor Fuel Tax Bureau at 410-260-7215.

The past session of the Maryland Legislature saw the passage of Senate Bill 51, enacted into law as Chapter 348, Laws of Maryland. It was signed by the Governor on May 15, 2001 and is effective July 1, 2002. The law itself is part of the Transportation Article, Section 22-404.3, Annotated Code of Maryland.

The law requires that vehicles registered with the Motor Vehicle Administration and having a gross weight over 10,000 pounds, and licensed to operate in Maryland only (intrastate), must display the name or trade name of its owner and a USDOT number issued by the State of Maryland.

There are several exceptions:

  • Vehicles registered as farm trucks,
  • School busses,
  • Emergency vehicles,
  • Vehicles used to transport money etc (armored vehicles),
  • Vehicles owned/operated by the State or local governments, and
  • Vehicles operating within 15 days from the date of purchase.

NOTE: All of these exceptions are automatically terminated when the vehicle is operated interstate (another state/jurisdiction in addition to Maryland).

The display is required to follow USDOT guidelines namely, be displayed on both sides of the cab of the vehicle, clearly visible and readable from a distance of 50 feet and be in a sharply contrasting color to the background.

When a USDOT number is assigned by Maryland, the letters MD will follow it. If the owner/operator of the vehicle than decides to begin interstate operation instead of solely intrastate, the MD is removed from the end of the assigned number at the same time IRP and perhaps IFTA registration are acquired.

Below is an example of a proper USDOT number issued by Maryland:

USDOT1234567MD

The Maryland Department of Transportation - not the Comptroller, will issue the numbers. For more information, see the MDOT web site: https://www.mdot.state.md.us

IFTA Renewal 2004
Please take the time to thoroughly review these items. Recent law changes have significantly altered procedures for renewing IFTA licenses and decals for 2004.

A new law (effective 7/1/03) prevents the Comptroller of Maryland from renewing any license (or issuing decals) for anyone who has an outstanding assessment with the Comptroller of Maryland or other state agencies.

We will review your decal file in November 2003. If you have no delinquent returns or outstanding assessments, we will automatically send you the same number of decals for 2004 that were active on your decal file at the time of review.

If you have delinquent returns or outstanding assessments with the Comptroller of Maryland or other state agencies at the time of the November review, we will not send you 2004 decals automatically. We will send you an IFTA application. Take immediate action to correct the outstanding obligations and submit the renewal application to this office.

Your 2003 IFTA decals will expire on 12/31/03. If you have not renewed your license and decals by 12/31/03, your IFTA account will be revoked. Operating while revoked is illegal and will subject you to fines.

If you renew your license after 12/31/03, you must display the decals on your vehicle before you start operating. If your license is renewed before 1/1/04, you have until 2/29/04 to display the new decals and license. However, we strongly encourage you to display the new decals on your vehicle as soon as possible.

We strongly encourage you to clear up any outstanding liabilities that you might have with the Comptroller of Maryland or other state agency immediately, to avoid having your IFTA license revoked on 12/31/03.

After review, if you have any questions, please contact us at: 410-260-7215 or MFT@marylandtaxes.gov

IFTA Renewal
Please make sure you settle any state tax liability that you may have with the Comptroller's Office or other state agency. By law, we cannot renew any license or issue any IFTA decals to you until your liability is resolved.

If you have any delinquent returns or outstanding state tax liabilities, we will send you an IFTA renewal application. Take immediate action to correct the outstanding obligations and then submit the completed renewal application to us. No decals will be issued to you for operation unless you are reinstated. Operating with a revoked license is illegal and subject to fines.

If you have no delinquent returns or outstanding assessments, we will automatically send you the same number of IFTA decals for 2005 that were active on your file at the time of the review. Please display the new decals on your vehicle as soon as you receive them.

You need the IFTA decal and license only if you are operating in more than one jurisdiction. If your account currently reflects two or more consecutive quarters showing no operations, or all of your operations in Maryland, we will cancel your account. You may reactivate your account when needed.

TO:  RETAIL SERVICE STATION REGISTRANTS

SUBJECT:  MEETING COMPETITION EXCEPTION TO SALES BELOW COST LAW

This release revises the administrative interpretation of the "meeting competition" exception to the below cost sales law. Under Business Regulation Article, § 10-304.1(b)(1), Annotated Code of Maryland, a retail service station dealer may sell motor fuel below cost if the sale is made in good faith to meet competition.

In Motor Fuel Regulation Administrative Release No. 1 dated February 24, 2010, it was stated that in order to qualify under the "meeting competition" exception, a retail service station dealer may not match a competitor's lower price if that competitor was, in fact, selling below cost. The example provided was as follows:

Example
If the cost of motor fuel for retail service station "A" is determined to be $2.50 per gallon, and the selling price is $2.45 per gallon, then station "A" is selling below cost. If station "A" claims the "meeting competition" exception in Business Regulation Article, § 10-304.1(b)(1) by matching the selling price of station "B", this exception will apply only if station "B" is not illegally selling below cost. If station "B" is determined to be illegally selling below cost, both station "A" and station "B" are in violation of § 10-304.1(a). If station "B" is not illegally selling below cost, then station "A" has met the standard for the "meeting competition" exception.

Upon further review and consideration, the Comptroller's interpretation of the "meeting competition" exception has been revised.

"Meeting Competition" Exception - Revised Administrative Interpretation
In order to fall within the "meeting competition" exception, a retail service station dealer must show that its below cost selling price was established in good faith to match a selling price of a competitor. Written records or a log of a competitor's selling prices will be considered adequate evidence to show that a retail service station was acting in good faith to meet competition. If it is determined by the Comptroller that the competitor was selling below cost, then both retail service stations must raise the selling price so that it is equal to or greater than cost. The Comptroller will not consider it a violation of the sales below cost law if a retail service station acts in good faith to match a competitor's lower selling price even if that competitor is selling below cost. Using the same example, the revised interpretation applies as follows:

Example
If the cost of motor fuel for retail service station "A" is determined to be $2.50 per gallon, and the selling price is $2.45 per gallon, then station "A" is selling below cost. If, in good faith, station "A" claims the "meeting competition" exception in Business Regulation Article, § 10-304.1(b)(1) by matching the selling price of station "B", who is determined to be illegally selling below cost, station "A" will not be considered in violation of § 10-304.1(a), even though station "B" is and will be charged accordingly. Both station "A" and station "B" will be immediately required to raise their selling prices to cost based on documents required under Regulation 03.03.05.06(A)(1), or in the absence of such documents, OPIS plus freight charges at the rate of 3 cents per gallon plus federal and states taxes.

Jeffrey A. Kelly
Director

TO: MOTOR FUEL INSPECTION REGISTRANTS, DEALERS, DISTRIBUTORS, SELLERS AND USERS

SUBJECT: TAX RATE CHANGES FROM THE TRANSPORTATION INFRASTRUCTURE INVESTMENT ACT OF 2013, CHAPTER 429

The Transportation Infrastructure Investment Act of 2013 was passed by the General Assembly and signed into law by the Governor on May 16, 2013. This release summarizes changes to the motor fuel tax rate, sales and use tax equivalent rate, and the inventory (floor) tax.

Motor Fuel Tax Rate
The Tax-General Article, §9-305, Annotated Code of Maryland indexes the motor fuel tax rates for all fuels, except aviation gasoline and turbine fuel to the annual change in the Consumer Price Index (CPI). The CPI is published monthly by the Bureau of Labor Statistics of the U.S. Department of Labor. The motor fuel tax rate will increase on July 1, 2013 and subsequently July 1st of every year thereafter. If there is a decline or no growth in the CPI, the motor fuel tax rates shall remain unchanged. The excise tax rate may not increase by more than eight percent (8%) of the tax rate imposed in the previous year. The current motor fuel excise tax rate may be found on the Motor Fuel Tax Rates page.

Sales and Use Tax Equivalent Rate
The Tax-General Article, §9-306, Annotated Code of Maryland imposes a sales and use tax equivalent rate on motor fuel based on the average annual retail price of regular unleaded gasoline, excluding Federal and State taxes.

The sales and use tax equivalent rate is determined by multiplying the average annual retail price by the applicable percentage rate. The tax begins in the month following the rate determination date. The percentage rate is one percent (1%) change for the determination made on June 1, 2013, two percent (2%) applicable for the determination made on December 1, 2014, three percent (3%) for the determination made on June 1, 2015, four percent (4%) for determination made on December 1, 2015, and then increases to five percent (5%) for the determination made on June 1, 2016.

Inventory - Tax Adjustment
The Tax-General Article, §9-306, Annotated Code of Maryland also requires that any person or entity possessing tax-paid motor fuel for sale on the date of an increase of either the motor fuel tax rate or the sales and use tax equivalent rate, pay the additional tax due on fuel held in inventory. For purposes of the inventory (floor) tax, tax-paid motor fuel held for sale includes that for a retail sale, a sale to an owner/operator, a sale to a contractor, or any other tax due sale. Each person or entity subject to the floor tax will be required to compile an inventory of motor fuel held for sale on the date of the increase, and report the inventory and tax due on forms provided by the Office of the Comptroller.

The inventory-tax adjustment return (COM/RAD-779) and additional tax will be due within thirty (30) days of the increase. See the Motor Fuel Tax Forms page to download a fillable form and view instructions. See also Frequently Asked Questions for Consumers.

Jeffrey A. Kelly
Director