Manufacturers and industrial processors with facilities located in Maryland, may be eligible for a utility tax exemption. Maryland offers an exemption from state sales tax and some local taxes on the purchase of electricity, natural gas, and water used in qualifying production activities. This tax exemption is authorized by Md. Code Regs. 03.06.01.10(A).

Exemption Language of Md. Code Regs. 03.06.01.10(A)

"The sale of gas, electricity, steam, oil, or coal, consumed directly and predominantly in a production activity… is not subject to tax."

Utility Study Requirement for Exemption Qualification

A Maryland utility tax study must list every piece of equipment and appliance (production and non-production) that uses the utility and the annual consumption of each. Failure to properly calculate or classify utility usage is cause for denial of the exemption.

Maryland Statute of Limitations on Tax Refund

3 years

State Sales Tax Rate: 6%

Average Local Sales Tax Rate: 0%

Helpful Resources

Maryland Utility Exemption Certificate: Form SUT206

Maryland Utility Exemption Statute/Rule: Md. Code Regs. 03.06.01.10(A)

Maryland Claim Form for Tax Refund: SUT205 Refund Application