Starting a service business in Maryland comes down to four things: picking a structure, registering with the state, getting licensed for your trade, and setting up a way to bill customers. Filing an LLC in MD costs $100, ongoing reporting is $300/yr (personal property return), sales tax is 6%, and personal income tax runs 2%–5.75% + county. Below is the full sequence, the fees you should budget for, the licenses most trades need, and the deadlines that catch new Maryland owners off guard.
Most new registrations come out of Baltimore, Frederick, Rockville — local business licenses are issued at the city or county level, so check yours after the state filing clears.
| Item | MD cost |
|---|---|
| LLC / entity filing (one-time) | $100 |
| Annual / periodic report | $300/yr (personal property return) |
| Federal EIN (IRS) | Free |
| Sales tax registration | Typically free |
| Trade / professional license | Varies by trade |
| Local business license | Set by city / county |
Fees change — confirm current amounts with the MD Secretary of State and the Comptroller of Maryland.
Choose your structure and file with the MD Secretary of State ($100). Get your free EIN from the IRS the same day.
Register for Maryland sales tax with the Comptroller of Maryland, then open a business bank account under the registered name.
Apply for your trade license and local business license. This is usually the longest step: Sales tax license; Trader's license.
Get general liability insurance (and workers' comp before your first hire), then set up estimates and invoicing so you can bill the day you're cleared to work.
LLC Filing Fee
$100
Annual Report
$300/yr (personal property return)
Sales Tax
6%
Income Tax
2%–5.75% + county
Choose business structure
File with MD SDAT
Get EIN
Register for state taxes
Get local licenses
Open business bank account
Maryland has county income taxes on top of state taxes
The personal property return is required annually
Yes — county rates range from 2.25% to 3.2% on top of state income tax.
Online LLC filings with the MD Secretary of State are typically processed in a few business days, and an EIN from the IRS is issued immediately online. Trade licensing and local permits usually take longest — plan on two to six weeks before you're fully cleared to work, depending on your trade.
No — you can operate as a sole proprietor in Maryland and still invoice customers legally. An LLC ($100 to file, $300/yr (personal property return)) separates your personal assets from business liability, which matters most once you're on customer property, hiring help, or signing contracts.
Maryland sales tax is 6%. Materials and goods are commonly taxable, while labor treatment depends on the type of work, so bill parts and labor as separate lines and register with the Comptroller of Maryland before you start collecting.
Open a business bank account under the registered name, then invoice from a tool that applies MD tax per line item and accepts cards. Glo Invoice sends invoices by text with a one-tap pay link, and Tap to Pay lets you charge on site before you leave the job.