A Maryland sales tax Voluntary Disclosure Agreement (VDA) lets an eligible business come forward to report and pay certain past-due Maryland taxes under terms set by the Comptroller of Maryland. The Comptroller’s program waives penalties when the taxpayer pays the tax and interest through the VDA. The exact position here depends on your own facts, so it is worth confirming with the state directly or talking to us about your situation.
Maryland is especially relevant to ecommerce and cross-border sellers because it applies a single statewide sales tax rate, while expressly taxing many digital products and treating some SaaS and technology services under specific rules. A seller’s exposure depends on its Maryland nexus, what it sells, how customers use the product, and whether the Comptroller has already contacted the business or begun an audit. Sales Tax Compliance USA is a people-staffed, done-for-you service that can help review those facts and manage registration, returns, and ongoing compliance; the Comptroller makes the VDA determination.
What Maryland’s sales tax VDA program does
The Comptroller of Maryland’s VDA program allows businesses and individuals to voluntarily report and pay past-due Maryland tax liabilities. It covers taxes and fees administered by the Comptroller, including sales and use tax. A VDA is a way to resolve eligible prior-period liability under an agreement; it is not a general exemption from tax or a guarantee that every applicant will qualify.
For a sales and use tax disclosure, the Comptroller’s VDA instructions call for a spreadsheet showing gross sales, sales and use tax due, and sales tax collected for each period in the disclosure period. The VDA liability and interest are placed on the taxpayer’s account, after which payment can be made. The instructions state that sales and use tax returns or summary sheets are not accepted by mail for this disclosure submission.
Who may qualify—and what happens after contact or an audit
This one varies by seller and by state, and it is the kind of detail we check for clients as part of the service — get in touch and we will confirm where you stand. The business must have a Maryland liability it is voluntarily disclosing and must meet the program’s conditions. The Comptroller reviews the request, so meeting the stated minimum does not by itself establish eligibility.
Voluntary disclosure depends on coming forward before the matter is already under examination. If Maryland has contacted your business about the liability or started an audit, do not assume you can still use the VDA program. The public VDA material available here does not establish every boundary for what counts as prior contact or an audit, so disclose the facts in writing and ask the Comptroller whether the business remains eligible before treating the VDA as available.
Check Maryland nexus before calculating exposure
Nexus is the connection that can require a seller to collect and remit Maryland sales and use tax. Review whether your business has a physical presence or other Maryland activity, and assess remote sales against Maryland’s current economic-nexus rules. The applicable threshold and how particular activities count should be checked against current Comptroller guidance; do not rely on an outdated threshold or assume that selling through a marketplace automatically resolves every obligation.
For an ecommerce review, gather Maryland-destination sales by period, order and customer records, marketplace sales, inventory or other in-state activity, and any tax collected. Cross-border sellers should also identify who is the seller of record and where the customer is located. These facts help determine whether registration was required, which transactions belong in the disclosure, and whether tax was collected but not remitted.
Determine which products and services Maryland taxes
Maryland taxes tangible personal property and specified services, and it expressly taxes digital products and digital codes. The Comptroller describes digital products broadly to include electronically obtained or delivered content such as e-books, music, video, and certain software. Exemptions and transaction-specific rules can change the result, so classify each product rather than treating all online sales as either taxable or exempt.
SaaS requires particular care. The Comptroller’s Technical Bulletin No. 56 explains that SaaS can fall within both the digital-product and software-publishing-service rules. SaaS for individual use may be taxable as a digital product, while qualifying enterprise-system use is treated under separate rules; the bulletin also addresses taxable data and information technology services and software publishing services. The customer’s use, the service provided, and any applicable exclusion or exemption matter. Maryland has one statewide rate rather than locally administered sales tax rates, but that does not make product classification simple.
Lookback period, tax calculation, and interest
The Comptroller’s VDA FAQs specify a four-year lookback period for sales and use tax. For a sales tax VDA, the disclosure is based on the required sales and tax information for each period in that window. Rather than give you a figure that may not apply to you, we would check this against the state’s current guidance for your specific setup — ask us and we will tell you exactly where you stand.
Estimate the liability from taxable Maryland sales, the tax that should have been collected, and any tax already collected or properly refunded. Keep the calculation tied to transaction records and product classifications. The Comptroller’s program waives penalties upon payment of tax and interest through the VDA; interest is not described as waived. The amount due therefore depends on the periods, taxable transactions, collections, and interest calculation accepted by the Comptroller.
Can the VDA be filed anonymously?
The Comptroller’s VDA FAQs say requests must be made in writing and provide an email address for requests. The materials available here do not confirm that an applicant may remain anonymous throughout the Maryland process or specify the conditions for an anonymous preliminary inquiry. Do not promise anonymity or send identifying information on the assumption that it will be protected.
If anonymity is important, ask the Comptroller or a qualified representative how to make an initial inquiry and what information must be disclosed at each stage. Sales Tax Compliance USA can help organize the facts and communicate about the process, but the Comptroller determines what information is required and whether the request qualifies.
How to apply for a Maryland sales tax VDA
Start by reviewing nexus, sales channels, customer destinations, product taxability, prior registrations, returns, and tax collected. Reconcile the records for the four-year sales and use tax lookback and prepare the period-by-period spreadsheet the Comptroller requires, including gross sales, tax due, and tax collected. Identify any prior Maryland contact or audit before submitting a request.
The Comptroller requires a written VDA request and lists vda@marylandtaxes.gov for submission. Follow the current VDA instructions and confirm the required format and supporting information with the Comptroller before sending sensitive records. If accepted, the Comptroller will set out the agreement and the steps for reporting and paying the liability. A service provider can prepare the analysis and filings, but cannot guarantee acceptance or a particular settlement.
Registration, filing, payment, and staying compliant
After the VDA terms are established, the business may need to register with Maryland to file and pay sales and use tax. The Comptroller identifies Maryland Tax Connect as its online portal for filing, payment, and taxpayer interactions. The VDA instructions state that the sales and use tax liability and interest are entered on the taxpayer’s account, and payment can be made once the liability appears there.
The public VDA information cited here does not specify a universal number of days after signing for filing or payment. Use the deadlines stated in your agreement and confirm them with the Comptroller; do not substitute the ordinary return calendar for a VDA deadline. For ongoing returns, the Comptroller assigns a filing frequency, and its sales and use tax guidance says returns are due on the 20th day of the month following the reporting period, subject to the next-business-day rule when the due date falls on a weekend or legal holiday. Monitor Maryland Tax Connect and Comptroller notices for your assigned schedule and any changes.
A practical way to reduce repeat exposure
Once the past liability is addressed, maintain a Maryland-specific product taxability map, retain transaction and exemption records, and reconcile marketplace and direct-channel sales. Review changes to your products, customer use cases, and Maryland activity because a new digital offering or a change in how SaaS is used can affect tax treatment.
Sales Tax Compliance USA provides human-led, done-for-you sales tax support for ecommerce and cross-border sellers, including nexus and product-taxability reviews, registration coordination, return preparation, and ongoing filing support. We can help you assemble the facts for a Maryland VDA and manage compliance work, while the Comptroller of Maryland decides eligibility, agreement terms, and amounts due.
Not sure how this applies to your business? We handle US sales tax registration, filing and remittance for ecommerce sellers as a fully managed service, for one fee. Book a free consultation and we will review your own position with you.
Maryland sales and use tax distinctions that can affect an ecommerce seller’s VDA calculation
| Transaction category | Maryland treatment to review |
|---|---|
| Tangible personal property sold at retail | Generally within the sales and use tax system unless an exemption applies; verify the item and transaction. |
| Electronically delivered digital products or digital codes | Expressly taxable unless an exclusion or exemption applies; review the product and customer transaction. |
| SaaS for individual use | May be taxable as a digital product; classify based on the actual use and applicable Comptroller guidance. |
| SaaS used solely in a qualifying enterprise computer system | Subject to distinct digital-product and taxable-service rules; the Comptroller’s Technical Bulletin No. 56 explains the treatment and relevant conditions. |
| Data or information technology and software publishing services | Certain services are taxable under Maryland’s rules; determine whether the service fits a taxable category and whether an exemption applies. |
| Sales delivered to Maryland customers | Maryland uses a single statewide sales tax rate rather than local jurisdiction rates; determine nexus, sourcing, taxability, and the applicable current rate. |
Frequently asked questions
What is Maryland’s Voluntary Disclosure Agreement program?
It is a Comptroller of Maryland program through which eligible businesses and individuals voluntarily report and pay past-due Maryland taxes, including sales and use tax. For sales and use tax, the Comptroller specifies a four-year lookback and requires a period-by-period spreadsheet of gross sales, tax due, and tax collected.
Who is eligible for a Maryland sales tax VDA?
The applicant must also meet the program’s conditions, and the Comptroller determines eligibility. Prior contact or an audit may affect whether the disclosure is considered voluntary, so disclose that history when asking about eligibility.
Can I apply if Maryland has already contacted me or started an audit?
Do not assume you remain eligible. Voluntary disclosure is intended for taxpayers who come forward, and prior contact or an audit can affect qualification; the available public material does not define every boundary. Ask the Comptroller whether your specific contact or examination prevents a VDA before proceeding.
Can I remain anonymous during the Maryland VDA process?
The Comptroller’s published instructions require a written request but the materials available here do not confirm that anonymity is available throughout the process or explain its conditions. Ask the Comptroller or a qualified representative how an initial inquiry is handled before sharing identifying details.
What is the lookback period for a Maryland VDA?
The Comptroller’s VDA FAQs state that the sales and use tax lookback period is four years.
Does Maryland waive penalties or interest under a VDA?
The Comptroller states that penalties are waived upon payment of tax and interest through the VDA program. Interest is still payable under that description, so do not treat the agreement as an interest waiver.
How do I apply for a Maryland Voluntary Disclosure Agreement?
Review your Maryland nexus and taxable sales, prepare the required period-by-period sales and tax spreadsheet, and submit a written request following the Comptroller’s current VDA instructions. The Comptroller lists vda@marylandtaxes.gov for requests. Confirm current submission requirements and disclose any prior contact or audit.
How long do I have to file and pay after signing the agreement?
The public VDA information cited here does not establish a universal post-signing number of days. Follow the deadlines in your signed agreement and confirm any uncertainty with the Comptroller. For ongoing returns, use the filing schedule assigned to your account and the due dates shown in current Comptroller guidance.
How we handle this for you
The mechanics in Maryland are manageable on their own; the cost is the time it takes every single filing period, in every state you are registered in. We are a managed service: our team registers you with the Comptroller of Maryland, prepares and files your returns, and keeps you compliant period after period. You get one point of contact and one invoice — you do not get another dashboard to learn.
See our sales tax compliance services, check where you have obligations with the nexus calculator, or talk to us about Maryland.
Official sources
- https://www.marylandcomptroller.gov/content/dam/mdcomp/tax/instructions/vda-program.pdf
- https://www.marylandcomptroller.gov/content/dam/mdcomp/tax/legal-publications/tips/business/bustip29.pdf
- https://www.marylandcomptroller.gov/content/dam/mdcomp/tax/legal-publications/tips/business/bustip22.pdf
- https://services.marylandcomptroller.gov/taxes/en/maryland-tax-connect-portal-information?id=kb_article_view&sysparm_article=KB0010001
Reviewed by Paul le Roux, CA(SA). Sales Tax Compliance USA handles US sales tax registration, filing and remittance for cross-border and domestic ecommerce sellers as a fully managed service.
This page is general information for educational purposes and does not constitute legal or tax advice. Sales tax rules change and depend on your specific facts. Consult a qualified tax professional about your own position.