Corporate

The corporate tax rate is 8.25 percent of the net income allocable to Maryland.

• Depreciation allowances in the state follow the federal Modified Acclerated Cost Recovery System.
• A corporation, in computing Maryland taxable income, may deduct from federal net taxable income dividends received from foreign subsidiaries, if the corporation owns 50 percent of more of the foreign subsidiary.

Apportionment

• Corporations whose trade or business is carried on partly within the state generally allocate business income to Maryland through the use of a three-factor, double-weighted sales factor formula of sales, property and payroll.
• Apportionment for manufacturers uses a single sales factor so that income tax liability is based solely on their percentage of in-state sales.
• Apportionment for services companies is based on the three-factor formula, and service receipts are sourced by the location of the taxpayer's customer, as opposed to the state in which the taxpayer incurred the greatest cost in providing the service.
• If the formula used produces an inequitable result, the State Comptroller has the authority to alter it and devise a more equitable basis for taxation.

Subchapter S Corporations, limited liability corporations, partnerships and sole proprietorships report income on their personal income tax returns.

State Corporate Income Tax Rates – 2013

Note: Top rate for states with multiple brackets.
Source: The Tax Foundation.