Maryland’s position between Washington, DC and Baltimore, and its highly educated workforce, make it a strong market for service businesses, contractors and professionals. Forming an LLC is inexpensive at $100, but Maryland’s yearly Form 1 annual report costs $300, one of the highest annual fees in the country, and it doubles as a business property tax return. Here’s how to set up your LLC and stay compliant.
What a Maryland LLC costs
Table of Contents
| Item | Cost | When |
|---|---|---|
| Articles of Organization | $100 ($50 extra to expedite) | At formation |
| Form 1 annual report and personal property return | $300 | April 15 each year, from the year after formation |
| Business personal property tax | Assessed locally, if you have reportable property | Yearly, after your return is filed |
| Trader’s license (if selling goods at retail) | Set by county | Yearly |
| Trade name registration (if using a DBA) | State fee | When registering |
Online payments may also carry a small service charge.
Step 1: Choose your LLC name
The name must include "limited liability company", "LLC", "L.L.C.", "LC" or "L.C." and be distinguishable from other names on record with SDAT. Search Maryland Business Express, then check federal trademarks, domains and social handles with our business name checklist.
To trade under another name, register a trade name with SDAT.
Step 2: Appoint a resident agent
Maryland requires a resident agent: a Maryland resident or a Maryland business entity with a physical Maryland address. You can serve yourself, name another adult or use a commercial agent. The agent must consent to the appointment.
Step 3: File Articles of Organization with SDAT
File Articles of Organization with the State Department of Assessments and Taxation (SDAT), usually online through Maryland Business Express, and pay $100. Expedited processing costs $50 more. You’ll include the LLC’s name, purpose, principal office address and resident agent.
In Maryland, the agency that handles business filings is also the property tax agency, which is why the annual report includes a property return.
Step 4: Create an operating agreement
Maryland doesn’t require you to file an operating agreement, but every LLC should have one, covering ownership, management, profit sharing and what happens when members join or leave.
Step 5: Get an EIN and open a bank account
Apply for a free EIN from the IRS online, then open a business bank account using your filed Articles and EIN. See choosing a business bank account.
Step 6: Register for state taxes and licenses
Register with the Comptroller of Maryland for:
- Sales and use tax, if you sell taxable goods or services. Maryland’s general rate is 6%.
- Employer withholding, if you hire.
Employers also register with the Maryland Department of Labor for unemployment insurance. If you sell goods at retail, you’ll generally need a trader’s license, issued through the clerk of the circuit court in your county or Baltimore City.
Step 7: File Form 1 by April 15 every year
Every Maryland LLC files Form 1, the Annual Report and Business Personal Property Return, with SDAT by April 15 each year, starting the year after formation. The filing fee is $300, whatever your revenue and whether or not you own any property. A filing extension is available if you request it in time.
The form has two parts:
- The annual report, which confirms your LLC’s details.
- The business personal property return, which lists furniture, equipment, tools and inventory the business owns, leases or uses in Maryland. If you have reportable property, local governments may assess personal property tax on it separately from the $300 fee.
Late filings bring penalties, and an LLC that doesn’t file can eventually be forfeited, losing its legal existence until reinstated.
Can the $300 fee be waived?
Maryland waives the $300 annual report fee for employers that enroll in MarylandSaves, the state’s retirement savings program for private-sector workers, or that certify they’re exempt, for example because they already offer a retirement plan. Check the current MarylandSaves rules if you have employees; it can save $300 a year.
Working out what to report on Form 1
The property section of Form 1 asks what tangible business property you own, lease or use in Maryland. A few practical points:
- List business assets at their original cost, grouped by category, such as furniture and fixtures, machinery and equipment, tools and inventory.
- Leased equipment may need to be reported too, depending on the arrangement.
- Very small amounts of property may fall under simplified reporting thresholds, but the annual report part and the $300 fee still apply.
- Keep an asset list from day one. A simple spreadsheet of purchases, with dates and costs, makes Form 1 quick each spring and helps your accountant with depreciation.
The local property tax that may follow is billed by your county or Baltimore City, not by SDAT. Rates and exemptions vary by locality.
How a Maryland LLC is taxed
By default, LLC profits pass through to the owners, who pay federal income tax, self-employment tax, Maryland’s graduated personal income tax and a local income tax levied by every county and Baltimore City. Multi-member LLCs taxed as partnerships file a Maryland partnership return. Maryland also lets eligible pass-through entities elect to pay tax at the entity level. LLCs electing C corporation status pay Maryland corporate income tax. Ask a tax professional which option suits you.
Hiring your first employee in Maryland
Beyond the federal steps in our first employee guide, Maryland employers generally:
- Register for state and local withholding with the Comptroller and unemployment insurance with the Department of Labor.
- Carry workers’ compensation insurance once they have employees.
- Provide earned sick and safe leave under Maryland law.
- Consider MarylandSaves, which can also unlock the annual report fee waiver.
- Report new hires to the state.
Your Maryland LLC compliance calendar
| Deadline | Filing | Paid to |
|---|---|---|
| April 15 each year | Form 1 annual report and personal property return ($300) | SDAT |
| After assessment | Business personal property tax, if billed | County or Baltimore City |
| Monthly, quarterly or yearly | Sales and use tax returns | Comptroller |
| As assigned | Employer withholding, if you have employees | Comptroller |
| Quarterly | Unemployment insurance reports, if you have employees | Department of Labor |
| Yearly | Trader’s license renewal, if required | Clerk of the circuit court |
Example: state costs for your first two years
For a single-member LLC filing online, without a fee waiver:
| Year 1 | Year 2 | |
|---|---|---|
| Articles of Organization | $100 | — |
| Form 1 annual report | — | $300 |
| State total | $100 | $300 |
Add any trader’s license, personal property tax, contractor or professional licenses, and optional services. Use our startup cost calculator to plan.
Maryland rules for common types of business
Contractors. Home improvement contractors and salespeople generally need a license from the Maryland Home Improvement Commission, and electrical, plumbing and HVAC work need separate licenses. See our Maryland contractor leads guide.
Food businesses. Restaurants and food trucks are permitted by county health departments. Maryland’s cottage food rules allow some home-produced foods to be sold directly to consumers. See our cottage food business guide.
Childcare. Child care centers and family child care homes are licensed by the state’s education department. See our home daycare guide.
Maryland, Virginia or DC?
Many businesses in the region serve customers in more than one jurisdiction. Maryland’s $300 yearly report compares with Virginia’s $50 annual registration fee, and Washington, DC has its own biennial report. Form where your business is based, then register in other places where you regularly do business. See our Virginia guide.
Mistakes to avoid
- Budgeting only $100. Plan for $300 every April.
- Skipping the property section of Form 1, or assuming the $300 covers property tax.
- Missing April 15, which can lead to penalties and forfeiture.
- Selling at retail without a trader’s license.
- Overlooking the MarylandSaves waiver if you have employees.
Frequently asked questions
When is my first Form 1 due? By April 15 of the year after your LLC is formed.
Do I owe the $300 if my LLC had no income? Yes, unless you qualify for the MarylandSaves waiver.
Can I be my own resident agent? Yes, if you’re a Maryland resident with a physical Maryland address.
What happens if my LLC is forfeited? It loses its legal existence and good standing until you file the missing reports, pay fees and penalties, and file for reinstatement.
Next steps
Read the Start a Business A–Z guide, see hiring your first employee, and plan with the break-even calculator.
This guide is general information, not legal or tax advice. Fees and rules change; check SDAT and the Comptroller of Maryland before you file.
Sources
- BusinessAnywhere, How much does an LLC cost in Maryland (October 2026)
- File.Business, Maryland filing requirements verified June 2026
- State Business Compliance, Maryland LLC taxes and fees 2026
- Maryland State Department of Assessments and Taxation
Last reviewed October 18, 2026. Startup costs are estimates; check local prices, licensing and tax rules before you commit money.
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