IPCPR Legislative | Operating Your Business in Maryland

Operating Your Business in Maryland

maryland

Operating Your Business in Maryland

Any person acting as an OTP manufacturer, retailer, storage warehouse, wholesaler, or tobacconist in Maryland must have an appropriate license. A license to act as an OTP retailer or tobacconist is required for each place of business. Licensing requirements do not apply to a seller located outside of Maryland when selling, holding for sale, shipping, or delivering premium cigars or pipe tobacco to consumers in Maryland.

 

Maryland also has specific “place of business” requirements for license applicants:

  • An applicant for a license to act as a manufacturer must maintain in Maryland an established place of business for the manufacture and storage of other tobacco products.
  • An applicant for a license to act as a storage warehouse must maintain an established place of business for storage of other tobacco products on which the tobacco tax has not been paid.
  • An applicant for a license to act as a wholesaler must maintain
    • an established place of business, including warehouse facilities, for the sale of other tobacco products and
    • necessary equipment and vehicles for the storage and distribution of other tobacco products.

 

Md. Code. Ann. Bus. Reg. § 16.5-202

 

The following are the application requirements for each type of OTP license:

  • Manufacturer or Storage Warehouse
    • Submit a Cigarette and OTP Licenses Application to the Comptroller of Maryland (Form 637); and
    • Pay a fee of $25
  • Wholesaler
    • Submit a Cigarette and OTP Licenses Application to the Comptroller of Maryland (Form 637); and
    • Pay a fee of $250
  • Retailer or Tobacconist
    • Obtain a county license by submitting to the clerk an application for each permanent or temporary place of business located in the same enclosure and operated by the same applicant; and
    • Pay a fee of $15

 

Md. Code. Ann. Bus. Reg. § 16.5-203

 

OTP licenses expire on the first April 30th after its effective date and must be renewed annually by submitting a renewal application and paying the license fee.

 

Md. Code. Ann. Bus. Reg. § 16.5-206

 

There are two limitations on holding more than one of the above licenses:

  • An OTP manufacturer, or person connected with the business of an OTP manufacturer or related by ownership, may not at the same time hold or have any financial interest in an OTP wholesaler license or in any business of an OTP wholesaler.
  • A person licensed as an OTP wholesaler, or person connected with the business of a licensed other tobacco products wholesaler or related by ownership, may not at the same time hold or have any financial interest in an OTP manufacturer license or in any business of an OTP manufacturer.

 

Md. Code. Ann. Bus. Reg. § 16.5-201

 

The Comptroller may require a person subject to the tobacco tax to post an OTP Bond (Form 722) for the tax in the following amounts:

  • For a manufacturer or wholesaler:
    • $10,000, plus
    • The amount, if any, by which the tobacco tax due for any 1 month exceeds $10,000
  • For a subwholesaler or vending machine operator:
    • $1,000, plus
    • The amount, if any, by which the tobacco tax due for any 1 month exceeds $1,000
  • For an OTP wholesaler:
    • $5,000, plus
    • The amount, if any, by which the tobacco tax due for any 1 month exceeds $5,000

 

The Comptroller may exempt a person from posting the above bond if the person is and has been for the past 5 years:

  • licensed as required under § 16.5-201 of the Business Regulation Article to act as an OTP wholesaler; and
  • in continuous compliance with the tobacco tax laws (i.e. has not failed to pay any tobacco tax when due or file a tobacco tax return when due); and
  • in continuous compliance with the conditions of the person’s bond

 

Md. Code. Ann. Tax Gen. § 13-825(h)

 

Manufacturers (Form 611) and storage warehouse operators (Forms 612, 612-1, and 612-2) must file monthly information returns with the Comptroller of Maryland no later than the 15th day of the following month, even if there is no activity to report for the previous month. Wholesalers must file a monthly report of Maryland sales of roll-your-own tobacco on which the tobacco tax has been paid by the manufacturer (Form 608-3) and an OTP tax return (Form 609) within 21 days after the end of each calendar month. OTP retailers and tobacconists must file quarterly tax returns (Form 610) by April 21st, July 21st, October 21st, and January 21st. Consumers in Maryland who purchased premium cigars must file a tax return (Form 620) by the 21st day of the month following the purchase.

 

Md. Code. Ann. Tax Gen. § 12-201: Returns of manufacturers and storage warehouse operators

Md. Code. Ann. Tax Gen. § 12-202: Returns of wholesalers

 

Localities may require additional business licenses.

Maryland Tobacco Tax Forms Database
http://taxes.marylandtaxes.com/Business_Taxes/Business_Tax_Types/Tobacco_Tax/Filing_Information/Tobacco_Tax_Forms/

 

Form 637: Cigarette and OTP Licenses Application
http://forms.marylandtaxes.com/tobacco_forms/637.pdf

 

Form 611: OTP Manufacturer Report
http://forms.marylandtaxes.com/tobacco_forms/611.pdf

 

Form 612: OTP Storage Warehouse Report
http://forms.marylandtaxes.com/tobacco_forms/612.pdf

Form 612-1: OTP Storage Warehouse Schedule – Acquisitions
http://forms.marylandtaxes.com/tobacco_forms/612-1.pdf

Form 612-2: OTP Storage Warehouse Schedule – Dispositions
http://forms.marylandtaxes.com/tobacco_forms/612-2.pdf

 

Form 608-3: Wholesaler’s monthly report of Maryland sales of roll-your-own tobacco
http://forms.marylandtaxes.com/tobacco_forms/608-3.pdf

 

Form 609: Maryland Wholesaler Tax Return

http://forms.marylandtaxes.com/tobacco_forms/609.pdf

 

Form 610: Maryland OTP Tax Return (Retailers and Tobacconists)
http://forms.marylandtaxes.com/tobacco_forms/610.pdf

 

Form 620: Consumer Premium Cigar Tax Return
http://forms.marylandtaxes.com/tobacco_forms/620.pdf

 

Form 722: OTP Bond
http://forms.marylandtaxes.com/tobacco_forms/OTPBond.pdf

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