# Tax - General (GTG)

## Title 12. Tobacco Tax

### Subtitle 1. Definitions; General Provisions

#### Section 12-101

(a) In this title the following words have the meanings indicated.

(b) "Cigarette" means any size or shaped roll for smoking that is made of tobacco or tobacco mixed with another ingredient and wrapped in paper or in any other material except tobacco.

(c) "Manufacturer" means a person who acts as a manufacturer as defined in Sec. 16-201 of the Business Regulation Article or as an other tobacco products manufacturer as defined in Sec. 16.5-101 of the Business Regulation Article.

(d) "Other tobacco product" has the meaning stated for "other tobacco products" in Sec. 16.5-101 of the Business Regulation Article.

(e) "Other tobacco products retailer" means a person authorized under Sec. 16.5-205(b) of the Business Regulation Article to purchase other tobacco products on which the tobacco tax has not been paid.

(f) "Out-of-state seller" means a person:

  (1) located outside the State that sells, holds for sale, ships, or delivers premium cigars or pipe tobacco to consumers in the State if, during the previous calendar year or the current calendar year:

    (i) the person's gross revenue from the sale of premium cigars or pipe tobacco in the State exceeds $100,000; or

    (ii) the person sold premium cigars or pipe tobacco into the State in 200 or more separate transactions; and

  (2) who is required to hold a remote tobacco seller license under Title 16.9 of the Business Regulation Article.

(g) "Pipe tobacco" has the meaning stated in Sec. 16.5-101 of the Business Regulation Article.

(h) "Premium cigars" has the meaning stated in Sec. 16.5-101 of the Business Regulation Article.

(i) "Sell" means to exchange or transfer, or to make an agreement to exchange or transfer, title or possession of property, in any manner or by any means, for consideration.

(j) "Tax stamp" means a device in the design and denomination that the Comptroller authorizes by regulation for the purpose of being affixed to a package of cigarettes as evidence that the tobacco tax is paid.

(k) "Tobacconist" means a person authorized under Sec. 16.5-205(e) of the Business Regulation Article to purchase other tobacco products on which the tobacco tax has not been paid.

(l) "Unstamped cigarettes" means a package of cigarettes to which tax stamps are not affixed in the amount and manner required in Sec. 12-304 of this title.

(m) "Wholesale price" means the price for which a wholesaler buys other tobacco products, exclusive of any discount, trade allowance, rebate, or other reduction.

(n) "Wholesaler" means, unless the context requires otherwise, a person who acts as a wholesaler as defined in Sec. 16-201 of the Business Regulation Article or as an other tobacco products wholesaler as defined in Sec. 16.5-101 of the Business Regulation Article.

#### Section 12-102

(a) Except as provided in Sec. 12-104 of this subtitle, a tax is imposed on cigarettes and other tobacco products in the State.

(b)

  (1) Except as provided in paragraph (2) of this subsection, a county, municipal corporation, special taxing district, or other political subdivision of the State may not impose a tax on cigarettes, other tobacco products, or electronic smoking devices as defined under Sec. 16.7-101 of the Business Regulation Article.

  (2) If a county imposed a tax on electronic smoking devices on January 1, 2020, the county may continue to impose a tax on electronic smoking devices at the same rate that was in effect on January 1, 2020.

#### Section 12-103

(a) A rebuttable presumption exists that any cigarette or other tobacco product in the State is subject to the tobacco tax.

(b) Cigarettes or other tobacco products are contraband tobacco products if they:

  (1) are possessed or sold in the State in a manner that is not authorized under this title or under Title 16, Title 16.5, or Title 16.9 of the Business Regulation Article; or

  (2) are transported by vehicle in the State by a person who does not have, in the vehicle, the records required by Sec. 16-219 or Sec. 16.5-215 of the Business Regulation Article for the transportation of cigarettes or other tobacco products.

(c) A person who possesses cigarettes or other tobacco products has the burden of proving that the cigarettes or other tobacco products are not subject to the tobacco tax.

#### Section 12-104

(a) "Consumer" means a person who possesses cigarettes or other tobacco products for a purpose other than selling or transporting the cigarettes or other tobacco products.

(b) The tobacco tax does not apply to:

  (1) cigarettes that a licensed wholesaler under Title 16 of the Business Regulation Article is holding for sale outside the State or to a United States armed forces exchange or commissary;

  (2) other tobacco products that an other tobacco products wholesaler licensed under Title 16.5 of the Business Regulation Article is holding for sale outside the State or to a United States armed forces exchange or commissary; or

  (3) cigarettes or other tobacco products that:

    (i) a consumer brings into the State:

      (1) if the quantity brought from another state does not exceed other tobacco products having a retail value of $100 or 5 cartons of cigarettes; or

      (2) if the quantity brought from a United States armed forces installation or reservation does not exceed other tobacco products having a retail value of $100 or 5 cartons of cigarettes;

    (ii) a person is transporting by vehicle in the State if the person has, in the vehicle, the records required by Sec. 16-219 or Sec. 16.5-215 of the Business Regulation Article for the transportation of cigarettes or other tobacco products; or

    (iii) are held in storage in a licensed storage warehouse on behalf of a licensed cigarette manufacturer or an other tobacco products manufacturer.

#### Section 12-105

(a) The tobacco tax rate for cigarettes is:

  (1) $5.00 for each package of 20 cigarettes; and

  (2) 25 cents for each cigarette in a package of more than 20 cigarettes.

(b)

  (1) Except as provided in paragraph (2) of this subsection, the tobacco tax rate for other tobacco products is 60% of the wholesale price of the tobacco products.

  (2)

    (i) In this paragraph, "pipe tobacco" and "premium cigars" have the meanings stated in Sec. 16.5-101 of the Business Regulation Article.

    (ii)

      (1) Except as provided in subsubparagraph 2 of this subparagraph, the tobacco tax rate for cigars is 70% of the wholesale price of the cigars.

      (2) The tobacco tax rate for premium cigars is 15% of:

      (A) the wholesale price of the premium cigars; or

      (B) for premium cigars sold by an out-of-state seller, the price determined under subsection (c) of this section.

    (iii) The tobacco tax rate for pipe tobacco is 30% of:

      (1) the wholesale price of the pipe tobacco; or

      (2) for pipe tobacco sold by an out-of-state seller, the price determined under subsection (c) of this section.

(c)

  (1) For premium cigars and pipe tobacco sold by an out-of-state seller, the tobacco tax rate applies to:

    (i) the actual price paid by an out-of-state seller for a stock keeping unit; or

    (ii) if the actual price paid by an out-of-state seller for a stock keeping unit is not available, the average of the actual price paid by an out-of-state seller for a stock keeping unit over the 12 calendar months before January 1 of the year in which the sale occurs.

  (2) The Comptroller shall adopt regulations to implement this subsection.

### Subtitle 2. Returns and Records

#### Section 12-201

(a) A manufacturer shall complete and file with the Comptroller a tobacco tax return:

  (1) on or before the 15th day of the month that follows the month in which the manufacturer distributes in the State free sample cigarettes of the manufacturer; and

  (2) if the Comptroller so specifies, by regulation, on other dates for each month in which the manufacturer does not distribute any sample cigarettes.

(b) A licensed other tobacco products manufacturer shall file the information return that the Comptroller requires.

(c) A licensed storage warehouse operator and a licensed other tobacco products storage warehouse operator shall file the information return that the Comptroller requires.

(d) An out-of-state seller shall file the information return that the Comptroller requires.

#### Section 12-202

(a) A wholesaler shall complete and file with the Comptroller a tobacco tax return:

  (1) for cigarettes:

    (i) on or before the 21st day of the month that follows the month in which the wholesaler has the first possession, in the State, of unstamped cigarettes for which tax stamps are required; and

    (ii) if the Comptroller so specifies, by regulation, on other dates for each month in which the wholesaler does not have the first possession of any unstamped cigarettes in the State; and

  (2) for other tobacco products, on or before the 21st day of the month that follows the month in which the wholesaler has possession of other tobacco products on which the tobacco tax has not been paid.

(b) Each return shall state the quantity of cigarettes or the wholesale price of other tobacco products sold during the period that the return covers.

#### Section 12-202.1

For periods beginning after December 31, 2026, a person shall file a tobacco tax return electronically. 

#### Section 12-203

(a) Each wholesaler shall:

  (1) keep an invoice for each purchase of tax stamps;

  (2) maintain a daily record of the tax stamps affixed to cigarette packages; and

  (3) maintain a complete and accurate record of each sale of cigarettes or other tobacco products for resale outside of the State.

(b) A wholesaler shall:

  (1) keep the records required under subsection (a) of this section for a period of 6 years or for a shorter period that the Comptroller authorizes; and

  (2) allow the Comptroller or the Executive Director to examine the records.

#### Section 12-204

(a) The Comptroller shall adopt regulations that:

  (1) require an out-of-state seller to maintain records of the cost of premium cigars and pipe tobacco acquired for sale into the State; and

  (2) specify the period for which an out-of-state seller must maintain the records required under item (1) of this subsection.

(b) An out-of-state seller shall allow the Comptroller or the Executive Director to examine the records maintained in accordance with subsection (a) of this section.

### Subtitle 3. Tax Payment

#### Section 12-301

In this subtitle, "licensed wholesaler" means a wholesaler who is licensed under Title 16, Subtitle 2 of the Business Regulation Article to act as a wholesaler or under Title 16.5, Subtitle 2 of the Business Regulation Article to act as an other tobacco products wholesaler.

#### Section 12-302

(a) A manufacturer of sample cigarettes shall pay the tobacco tax on those cigarettes distributed in the State without charge, in the manner that the Comptroller requires by regulation, with the return that covers the period in which the manufacturer distributed those cigarettes.

(b) The wholesaler who first possesses in the State unstamped cigarettes for which tax stamps are required shall pay the tobacco tax on those cigarettes by buying and affixing tax stamps.

(c) The tobacco tax on other tobacco products shall be paid by the wholesaler who sells the other tobacco products to a retailer in the State.

(d)

  (1) A licensed other tobacco products retailer or a licensed tobacconist shall pay the tobacco tax on other tobacco products on which the tobacco tax has not been paid by filing a quarterly tax return, with any supporting schedules, on forms provided by the Comptroller on the following dates covering tax liabilities in the preceding quarter:

    (i) January 21;

    (ii) April 21;

    (iii) July 21; and

    (iv) October 21.

  (2) A licensed other tobacco products retailer or a licensed tobacconist required to file a tax return under paragraph (1) of this subsection shall pay a tobacco tax at the rate provided in Sec. 12-105(b) of this title based on the invoice amount charged by the licensed other tobacco products manufacturer, exclusive of any discount, trade allowance, rebate, or other reduction.

(e)

  (1) An out-of-state seller shall pay the tobacco tax on pipe tobacco or premium cigars on which the tobacco tax has not been paid.

  (2) An out-of-state seller shall pay the tobacco tax on pipe tobacco and premium cigars by filing a tax return, with any supporting schedules, on forms provided by the Comptroller:

    (i) on or before the 21st day of the month after a sale of premium cigars or pipe tobacco is made; or

    (ii) on dates specified by the Comptroller by regulation.

  (3) For the period that the return covers, the return shall state:

    (i) the stock keeping unit number for any premium cigars and pipe tobacco sold; and

    (ii) for each stock keeping unit:

      (1) the quantity of premium cigars and pipe tobacco sold during the return period; and

      (2) the price of the premium cigars and pipe tobacco sold, as determined under Sec. 12-105(c) of this title.

#### Section 12-303

(a)

  (1) A licensed wholesaler may buy tax stamps, in the manner and at the time that the Comptroller requires by regulation.

  (2) Tax stamps may not be bought from a person other than the Comptroller unless the buyer:

    (i) has written permission from the Comptroller to do so; or

    (ii) is acting in accordance with the regulations of the Comptroller for stamping floor stock.

(b) The Comptroller shall allow a licensed wholesaler a discount of 0.82% of the purchase price of tax stamps.

#### Section 12-304

(a) A manufacturer that pays the tobacco tax shall indicate prominently on each package of cigarettes that:

  (1) the package contains sample cigarettes that are not for sale; and

  (2) all applicable tobacco taxes on those cigarettes have been paid.

(b)

  (1) Except as provided in subsection (c) of this section, within 72 hours after receiving cigarettes in the State and before selling or attempting to sell the cigarettes, a licensed wholesaler who first possesses the cigarettes shall affix, to the smallest cigarette package, tax stamps:

    (i) in a total amount that at least equals the tobacco tax due on the number of cigarettes in the package; and

    (ii) in the manner that the Comptroller requires, including placing the tax stamps on the cigarette package so that the stamps are visible to a buyer.

  (2) If a tax stamp has been affixed to a package of cigarettes, a person may not affix the same tax stamp to another package of cigarettes.

(c) A licensed wholesaler is not required to affix tax stamps to:

  (1) sample cigarettes if the cigarette package is marked in accordance with subsection (a) of this section; or

  (2) cigarettes that are segregated or marked to indicate that the cigarettes:

    (i) were received within the immediately preceding 72 hours; or

    (ii) are being held for a sale or use that is exempt under this title.

(d)

  (1) Except as provided in subsection (c)(2) of this section, a rebuttable presumption exists that any unstamped cigarettes in the possession of a licensed wholesaler are possessed in violation of this title.

  (2) The licensed wholesaler who possesses unstamped cigarettes has the burden of proving that the cigarettes are not possessed in violation of this title.

#### Section 12-305

(a) Unless otherwise authorized under this title, a person may not possess, sell, or attempt to sell unstamped cigarettes in the State.

(b) A person may not make, cause to be made, or procure an altered or counterfeited tax stamp.

(c) A person may not knowingly or willfully use, transfer, or possess an altered or counterfeited tax stamp.

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Md. Code Ann., Tax-Gen. (as displayed at mgaleg.maryland.gov, October 16, 2026)