Maryland Business License

Interested in launching your business in Maryland?

Depending on your exact location and niche, you may be required to obtain one — or several — business licenses and/or permits.

This Maryland Business License guide will help you navigate through all local, state, and federal requirements with ease, breaking down all of the correct forms, fees, and regulations that you will need to know.

Let’s get started.

Do I Need a Business License in Maryland

The state of Maryland does not have a statewide business license that is applicable to all businesses.

This means that whether you need a business license or not will be dependent on your specific niche and location.

Type of Business

Below, we’ve detailed common ways in which your business type can dictate the licenses you’ll be required to obtain, as well as specific examples of these:

• Sales and Use Tax Certificates: For businesses dealing in tangible goods or specific taxable services, obtaining a Sales Tax Certificate of Authority from the Maryland State Department of Taxation and Assessments is mandatory
• Occupational and Professional Licensing: Businesses in regulated professions like architecture, medicine, or engineering must acquire an industry-specific license from the Maryland State Education Department, Office of the Professions
• Health and Safety Permits: Companies that have a potential impact on public health, such as those with swimming pools, are required to obtain specific permits (e.g., the Bathing Establishment With Pool permit from the Maryland City Department of Health and Mental Hygiene, etc.)

However, this is not the only factor influencing the exact combination of licenses you’ll need — the location of your business within Maryland plays an important role as well.

Location

In this section, we’ve provided a succinct overview of the potential licenses and permits that your business may need due to local, state, and federal requirements:

• Local: Business license requirements can vary widely depending on your exact jurisdiction. For example, if you’re operating a restaurant in Baltimore, you’ll need a food service license from the Baltimore Health Department in addition to a general business license. If you need a construction license, you will need to obtain this from the appropriate Clerk of the Circuit Court
• State: At the state level, businesses are often required to obtain specialized licenses depending on the industry. For example, if you’re planning to operate a retail business, you’ll need to obtain a Trader’s License. Keep in mind that Initial registration with the Maryland Department of Assessments and Taxation is necessary before you can apply for these state-level licenses
• Federal: While most small businesses in Maryland are exempt from federal licenses or permits, businesses involved in sectors regulated by the federal government must obtain specific credentials. These sectors primarily include agriculture, alcoholic sales, and firearms, among others

Since the exact permits and licenses your business organization will need are entirely unique to your situation, you’ll have to conduct thorough research into your local, state, and federal regulations to smoothly launch your business.

Alternatively, many entrepreneurs opt to leverage the expertise of third-party services to handle this on their behalf.

How to Get a Business License in Maryland

In order to get your business license(s) in Maryland, you will need to complete the following steps:

• Form Your Business
• Obtain an Employer Identification Number (EIN)
• Apply for the Required Licenses and Permits

Let’s take a look at each step in more detail below.

Step 1: Form Your Business

Before setting out to obtain a business license in Maryland, it’s pivotal that you first choose an appropriate structure for your business. Sole proprietorships, general partnerships, and corporations are all common choices, however, it’s often seen as the most advantageous for small businesses in Maryland to form a Limited Liability Company (LLC). There are a few reasons why:

• Limited Liability: Members are protected from personal liability for business debts, safeguarding personal assets
• Tax Benefits: LLCs typically enjoy a pass-through tax treatment, avoiding double taxation that corporations are subjected to
• Management Flexibility: LLCs allow for flexibility in management structure, either being member-managed or manager-managed based on the preferences outlined in the certificate of formation
• Ease of Formation: With the Maryland Secretary of State providing forms that meet the minimum state law requirements and the option to file online, setting up an LLC is relatively straightforward

Many small business owners opt to avoid the tricky process of forming an LLC by instead leveraging the help of third-party LLC formation services.

Step 2: Obtain an EIN

The second step you’ll need to complete before applying for your business license is to obtain your EIN. This is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses in the United States so that their financial transactions can be identified and tracked.

An EIN is often necessitated when applying for various permits and licenses as it allows local and state governments to ensure your business is operating within the confines of the law. You can obtain it in a number of ways:

• Online: You can apply for your EIN on the IRS’s official website by using the EIN Assistant. You should be granted your EIN shortly after completing this application
• By Fax/Mail: After completing Form SS-4, you can apply for an EIN by submitting it to the IRS via mail or fax
• By Phone: International applicants and businesses operating outside US Territories are required to call the IRS at (267) 941-1099 to obtain their EIN — which they should receive during this call

Note: If you are a sole proprietor, you will be able to use your Social Security Number (SSN) instead (as long as you do not have employees).

Step 3: Apply for Licenses and Permits

After settling on the appropriate structure for your business and initiating the application for your EIN, the next step is to focus on securing the necessary licenses and permits to operate legally within your locale and industry.

• Local Licenses: In Maryland, applying for local licenses typically involves contacting the finance office of the county where your business will operate. For instance, in Cecil County, you would approach the Cecil County Finance Office. The county offices usually offer multiple methods for application — such as mail, fax, or in-person submissions
• Statewide Licenses: When it comes to statewide licenses, the state of Maryland provides a convenient online portal for all businesses. This is known as Maryland OneStop
• Federal Licenses: While the federal government doesn’t mandate licenses for general business operations, if your business falls under any government-regulated category, such as agriculture, fishing, firearms, and alcohol sales, it may be required to obtain an additional federal business license or permit

Note: For more localized information, we recommend consulting with the respective websites of the Maryland counties and/or cities that your business will be based in.

Step 4: Renewal of Licenses and Permits

In Maryland, most business licenses must be renewed annually by April 30 in order to remain valid for the following year, starting on May 1st. This is the case regardless of when they were originally issued.

If you’re uncertain about whether you need to renew any of your Maryland business licenses, we recommend reaching out to the agency that issued each one for additional clarification.

Alternatively, due to how complicated each step of applying for and renewing a business license is, you can choose to use a third-party service instead.

How Much is a Business License in Maryland

Your total business license cost in Maryland will depend on several factors, such as your jurisdiction and the specific nature of your business. For instance, in Cecil County, fees for a general business license can range anywhere from $25 to $400.

If you’re venturing into the food service sector and plan to operate a restaurant in Cecil County, you will additionally need a Cecil County Food Establishment license, which generally costs around $200 per year.

We recommend consulting with relevant governmental bodies in order to understand all of the basic Maryland tax requirements that will be applicable to your business.

These can include the local finance department, the Maryland State Department of Assessments and Taxation, and the Comptroller of Maryland. For more comprehensive information about business licensing across different Maryland jurisdictions, the Maryland Business Express website can additionally serve as an invaluable resource.

Alternatively, you can use a third-party service (recommended) or a business attorney in order to save time and ensure that you avoid potential fines and/or penalties.