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A state sales tax is imposed for the privilege of selling tangible personal property at retail. Rental, lease or license to use such property is also taxed.
The sale or a sale for use of a motor vehicle that is used principally in interstate or foreign commerce and a sale or a sale for use of a replacement part or other tangible personal property to be used physically in, on, or by it, are exempt from the tax.
There are also specific exemptions for leases and rentals. To claim the sales tax exemption, buyers must provide the vendor with a statement certifying the motor vehicle (or replacement parts) will be used principally in interstate commerce.
There are some specific exemptions to this tax. For example, Maryland exempts the sale of transportation services from tax, as well as vehicle and liquid fuels which are already taxed, and new or used motor vehicles subject to an excise titling tax under the Motor Vehicle Code or which will be titled or registered in another state.
All sales of tangible personal property are presumed to be subject to tax, unless proven otherwise. The burden of proof of exemption is on the vendor or purchaser, as the case may be.
A compensating excise (use) tax is imposed on the use, storage or consumption of tangible personal property and some services purchased in or out of the State of Maryland. Transactions subject to a sales or use tax in another jurisdiction that is equal to or greater than Maryland's tax are exempt from the Maryland use tax. If the tax paid in another jurisdiction is less than the Maryland tax, the difference must be paid to the State of Maryland.
Tax is imposed on short-term (less than 180 days) rental of cars or Classes E, F or G trucks, if the vehicle is not used for transportation of property for-hire. A sales and use tax credit is allowed for any titling tax paid on the rental vehicle.