# COMAR Title 03 — Comptroller of the Treasury

## Subtitle 06 — Sales and Use Tax

### Chapter 03 — Administrative and Procedural Regulations — Sales and Use, and Admissions and Amusement Taxes

**Authority:** Tax-General Article, §§2-102, 2-103, 11-104, and 11-245, Annotated Code of MarylandCh. 203, Acts of 2003

**Administrative History:** Effective date: January 1, 1990 (16:25 Md. R. 2709)

**Administrative History:** Regulation .02 amended effective August 19, 2013 (40:16 Md. R. 1341); March 2, 2026 (53:4 Md. R. 183)

**Administrative History:** Regulation .02D, H amended effective August 21, 2023 (50:16 Md. R. 725)

**Administrative History:** Regulation .03A amended effective October 1, 2003 (30:19 Md. R. 1329)

**Administrative History:** Regulation .03A, C amended effective August 21, 2023 (50:16 Md. R. 725)

**Administrative History:** Regulation .04D amended effective January 14, 1999 (26:1 Md. R. 22)

**Administrative History:** Regulation .05A amended effective January 14, 1999 (26:1 Md. R. 22)

**Administrative History:** Regulation .05A, C amended effective August 19, 2013 (40:16 Md. R. 1341)

**Administrative History:** Regulation .05B amended effective August 31, 1992 (19:17 Md. R. 1606)

**Administrative History:** Regulation .06 repealed and new Regulation .06 adopted effective January 14, 1999 (26:1 Md. R. 22)

**Administrative History:** Regulations .07 and .08 repealed effective August 6, 1990 (17:15 Md. R. 1853)

**Administrative History:** Regulation .09 recodified to be Regulation .07 effective August 20, 1990 (17:16 Md. R. 1990)

**Administrative History:** Regulations .08 and .09 adopted effective December 9, 1991 (18:24 Md. R. 2641)

**Administrative History:** Regulations .08 and .09 repealed effective January 14, 1999 (26:1 Md. R. 22)

#### Regulation .01 Owners, Lessors, and Operators of Places Where Amusements Are Conducted.

*COMAR 03.06.03.01*

A lessor shall give prompt notice to the Comptroller containing the information in §§A—E, below, when a place from which gross receipts subject to the admissions and amusement tax are derived, is rented, hired, or leased by any person:

A. The name and address of the lessee;

B. The character of amusement or entertainment;

C. The theater, park, hall, or similar place giving the name if one is used and known to the public;

D. The date or dates upon which or during which the place of amusement or entertainment is leased; and

E. The name and address of the lessor.

#### Regulation .02 Records.

*COMAR 03.06.03.02*

A. Each taxpayer is required to keep, for a period of 4 years, unless permission is obtained from the Comptroller to destroy the records after a shorter period of time, all records in connection with:

  (1) Sales and purchases; and

  (2) Gross receipts subject to the admissions and amusement tax.

B. The records shall be adequate to distinguish taxable sales, purchases, or gross receipts from nontaxable sales, purchases, or gross receipts. This requires keeping all invoices, bills of lading, purchase orders, sale slips, cash register tapes, meter readings, invoices, contracts, tickets, billing slips, journals, ledgers, inventory records, bank records, and advertising and promotional literature.

C. In the event a vendor elects to assume or absorb all or part of the sales and use tax on any retail sale, the records shall also distinguish sales in which the vendor assumed or absorbed the tax from sales in which the vendor did not assume or absorb the tax.

D. Exempt Sales.

  (1) If sales for resale are made, resale certificates obtained from the purchaser shall be retained. For sales and use tax purposes, if a sale to an exempt purchaser is made, an exemption number issued to the purchaser shall be a part of the sales record.

  (2) For every sale of medical cannabis, as defined in COMAR 03.06.01.47, the qualifying patient or caregiver’s registration number shall be a part of the sales record.

E. Sales to contractors of material to be incorporated into exempt jobs shall be supported by written statements from the contractors, identifying the jobs and certifying that the materials are for incorporation into the jobs.

F. If a sale is subject to a multiple points of use certificate, the certificate and all applicable records obtained from the purchaser shall be retained by the vendor.

G. If a sale is subject to a multiple points of use certificate, the buyer shall retain records as they exist at the time of sale supporting:

  (1) The apportionment reflecting the primary use location in the State; and

  (2) The method of apportionment.

H. The taxpayer is required to make records available for inspection and examination by the Comptroller or authorized representative at any time during business hours.

I. If the taxpayer fails to keep the records required, the Comptroller may compute the taxes due by using a factor that the Comptroller develops by:

  (1) A survey of the business of the person including any available records;

  (2) A survey of other persons engaged in the same or similar business; or

  (3) Other means.

J. The computation of the tax under §I of this regulation is presumptively correct.

#### Regulation .03 Returns.

*COMAR 03.06.03.03*

A. Filing Requirements.

  (1) Sales and Use Tax.

    (a) Subject to §A(1)(b) of this regulation, a person who makes taxable sales or purchases during the course of a month shall file with the Comptroller a report of those sales or purchases, accompanied by payment of the taxes due, by the 20th day of the succeeding calendar month.

    (b) A person who makes retail sales, sales for use, or purchases for use of cannabis, as defined in COMAR 03.06.01.47, during the course of a month shall file a separate report and payment for each physical location in the State at which the person makes retail sales, sales for use, or purchases for use of cannabis.

  (2) A person deriving gross receipts subject to the admissions and amusement tax shall file with the Comptroller a report of those gross receipts, accompanied by payment of the tax due, by the 10th day of the succeeding calendar month.

B. Filing Bases.

  (1) If the Comptroller determines from an application for a license, previous reporting history, or through audit that a taxpayer is expected to remit less than $100 per month in taxes, the Comptroller may assign a filing basis that is less frequent than monthly. Under those circumstances, the Comptroller may also specify a due date other than that specified in §A, above. In addition, vendors who do not normally make taxable sales subject to the sales and use tax or derive gross receipts subject to the admissions and amusement tax in each calendar month may be assigned a seasonal or other irregular filing basis as the Comptroller deems appropriate.

  (2) A person assigned a filing basis which is other than monthly shall notify the Comptroller whenever the person has reason to believe that future tax payment obligations will average more than $100 per month.

  (3) A person assigned a filing basis which is less frequent than four times per year, shall file with the Comptroller a supplemental return for any month other than the month or months for which scheduled returns are due, in which taxes due for that month exceed $100. This return, which is due by the due date set forth in §A, above, shall also encompass any previously unreported taxes accrued since the person's most recently filed return. Filing of this return does not affect a person's liability to file the next scheduled return.

C. The Comptroller shall mail appropriate returns to registrants who request them well in advance of due dates. The failure to receive a return from the Comptroller does not, however, alter a person's obligation to file on time. A person who has not received a return from the Comptroller far enough in advance of the due date to avoid a late filing shall request an additional form from the Comptroller or file a signed schedule providing the information normally required on a return, together with the taxes due, on or before the due date.

D. A person registered with the Comptroller for sales and use tax purposes and admissions and amusement tax purposes shall file returns in accordance with that person's filing schedule, even if taxes are not due.

E. Late Charges.

  (1) Statutory late charges are applicable to a person who files a return without payment in full or after the due date specified for the return.

  (2) The Comptroller is authorized to abate late charges for cause shown. The Comptroller shall consider a record of timely filing of returns as cause shown for abating late charges on one occurrence during any 12-month period, absent evidence of other noncompliance during this period. Abatements shall be made by the Comptroller without a request if qualification can be determined on an automated basis.

  (3) A person whose late charges have been waived on the basis of a previous record of timely filing is expected to take whatever steps are necessary to file subsequent returns on time. A second abatement of late charges during any 12-month period may not be authorized in the absence of a clear showing of cause relating to that return alone. The fact that late charges might have been abated on the first late return, for reasons other than a previous good filing record, is not relevant to this determination.

#### Regulation .04 Refunds of Admissions and Amusement Tax.

*COMAR 03.06.03.04*

A. A taxpayer who has erroneously paid more admissions and amusement taxes, penalty, or interest than properly and legally payable may apply to the Comptroller for a refund on a form available from the Comptroller.

B. The Comptroller shall deny any request for a refund received more than 3 years after the tax or other charges for which the refund is requested were paid to the Comptroller by the taxpayer requesting the refund.

C. The Comptroller shall pay interest on the refund from the 45th day after the claim is filed, in the manner required by statute, to the date on which the refund is paid, unless the claim for refund is based on an error or mistake of the claimant not attributable to the State or a unit of the State government.

D. A person may appeal a denial of a refund by applying for a hearing. The hearing process is governed by COMAR 03.01.01.04.

#### Regulation .05 Refunds of Sales and Use Tax.

*COMAR 03.06.03.05*

A. General.

  (1) The Comptroller shall treat any request for a credit as a request for a refund.

  (2) The Comptroller shall deny any request for a refund received more than 4 years after the tax was paid by the applicant to the Comptroller or to a licensed tax collector.

  (3) If the request for a refund is for taxes previously paid with a return, and from which a collection discount was deducted by the person making the request, the Comptroller:

    (a) If the entire amount of the taxes previously paid with a return was subject to the collection discount, shall deduct from the approved amount the amount of the collection discount; or

    (b) If the entire amount of the taxes previously paid with a return was not subject to the collection discount:

      (i) Shall deduct from the approved amount the amount of the collection discount if, after excluding the approved amount from the total amount of tax previously paid with the return, the taxpayer would not exceed the collection discount limitation; or

      (ii) May not deduct from the approved amount the amount of the collection discount if, after excluding the approved amount from the total amount of tax previously paid with the return, the taxpayer would still exceed the collection discount limitation.

  (4) The Comptroller shall pay interest on the refund from the 45th day after the claim is filed, in the manner required by statute, to the date on which the refund is paid, unless the claim for refund is based on an error or mistake of the claimant not attributable to the State or a unit of State government.

  (5) For sales and use tax assessments made after June 30, 1989, a credit is authorized for tax overpayments for the periods covered by the assessments. The credit will be permitted during the course of the audit to the extent that it can be verified at that time. In all other instances, taxpayers should file a documented claim for a refund identifying the assessment claim to which the refund relates.

  (6) A person may appeal a denial of a refund by applying for a hearing. The hearing process is governed by COMAR 03.01.01.04.

B. Special Provisions for Licensed Taxpayers.

  (1) Refunds Up to $1,000.

    (a) A licensed taxpayer who is entitled to a refund of not more than $1,000, but not to exceed the amount of tax to be paid with a current return, may request the refund by deducting the amount requested from the total tax due with any return, in the space provided on the return.

    (b) A licensed taxpayer electing the method in §B(1)(a) of this regulation  shall keep all records and documents relating to and supporting the request for a period of 4 years from the date of the return on which the request was made. If, within 4 years from the date of the return, the Comptroller determines that any portion of the refund taken with the return was improper, a deficiency assessment shall be levied, including penalty and interest, against the taxpayer for the improper amount.

  (2) Refunds in Excess of $1,000.

    (a) A licensed taxpayer who wishes to claim a refund in excess of $1,000, or in excess of the amount to be reported with a return, may not deduct the amount from the return, but may only file a claim for refund.

    (b) If any portion of the claim in §B(2)(a) of this regulation is approved, the Comptroller may either issue a check for the amount approved or credit the licensed taxpayer's account, or do a combination of both. The amount of any credit in a licensed taxpayer's account, up to the amount due with a subsequent return, may be deducted from the taxpayer's remittance enclosed with that return.

  (3) Cancelled and Returned Sales. If a licensed vendor has refunded the purchase price and tax to a customer for a cancelled sale, the vendor may deduct the amount of the purchase price refunded from the total amount reported as taxable sales on a return, and the amount of tax refunded from the total amount reported as tax collected on the return, provided the vendor keeps accurate records of the transaction.

C. Special Provisions for Requests for Refund of Sales and Use Tax Assumed or Absorbed by a Vendor.

  (1) Subject to the provisions of §B of this regulation, a vendor who has assumed or absorbed sales and use tax on a retail sale or use may claim a refund of sales and use tax, penalty, or interest erroneously paid in excess of the amount properly and legally payable to the Comptroller.

  (2) Records and documents relating to and supporting the request for refund of assumed or absorbed sales and use tax, penalty, or interest shall:

    (a) Show that sales and use tax was separately stated from the sale price on any record of sale; and

    (b) Conclusively demonstrate that the vendor paid the sales and use tax on behalf of the buyer.

#### Regulation .06 Revocation of Sales and Use Tax Licenses.

*COMAR 03.06.03.06*

A. The Comptroller may deny a license to an applicant, reprimand a licensee, or suspend or revoke a license:

  (1) If the applicant or licensee fraudulently or deceptively obtains or attempts to obtain a license for the applicant or licensee or for another, or fraudulently or deceptively uses a license; or

  (2) For cause.

B. The Comptroller shall schedule a hearing before taking any of the actions described in §A of this regulation. The hearing process is governed by COMAR 03.01.01.04.

#### Regulation .07 Bad Debts.

*COMAR 03.06.03.07*

A. A vendor is required to remit the sales and use tax on an accrual basis. If a vendor is unable to collect accounts receivable on which the sales and use tax has been remitted, a credit may be taken or refund applied for within 4 years of the vendor's payment of the tax.

B. Vendors that are required to file federal income tax returns may claim a credit or refund only for the amount of tax that is uncollected on accounts that have been written off for federal income tax purposes.

C. Vendors shall apply partial payments from buyers proportionately to uncollected principal, interest, and tax at the time of receipt. The amount of credit or refund may not be computed on any basis that results in partial payments being disproportionately applied to unpaid principal or interest.

D. The amount of the credit or refund for repossessed merchandise shall be computed on the basis of the difference between the unpaid balance and the value of the merchandise at the time of the repossession.

E. Vendors may take credits for bad debts directly by reducing otherwise reportable taxable sales and tax collections on returns. Since these credits are treated as reductions of tax collections and not as refunds, they may not be reported as refunds on returns and are not subject to the dollar limitations generally applicable to refunds claimed on returns. Bad debt credits taken on returns may not exceed the net tax due.

F. Vendors who take credits for bad debts on returns shall maintain complete and accurate records to support the credits for a period of 4 years. If, within 4 years from the date of the return, the Comptroller determines that any portion of the credit taken was improper, a deficiency assessment plus late charges shall be levied for the underpayment.

G. Vendors who recover amounts previously claimed as bad debt credits or refunds shall report these recoveries on their next sales and use tax report by increasing reportable taxable sales and tax collections by the amount recovered.