As of Monday, Maryland has eliminated a small excise tax vendor discount for dealers, but the adjustment only impacts cars sold today or later. As of June 1, dealers will no longer be able to retain a $12-per-car state fee (or 0.6 percent of the total state excise tax collected, whichever is lower), as outlined in the 2020 state budget.
Beginning with sales that were completed on June 1 or later, dealers must remit the full 6 percent Maryland excise tax to the state government. You can view the language on page 61 of the budget, which modifies Section 13-812 of state law; the language pertaining to the vendor discount is in part (a), which is being eliminated from the state code.
Please update your dealer management systems to reflect this change in the tax code as soon as possible.
There had previously been questions about whether the elimination of the discount would be in place for sales that had been finalized before June 1, but where the excise tax had not yet been paid before that date. The state has provided additional guidance that the allowance will only be eliminated for sales that occur today or later, irrespective of when excise taxes on earlier sales are paid.
Please also note that Maryland has also raised the cap on the dealer processing charge from $300 to $500, and that new limit can be imposed on new car sales beginning on July 1. The $500 cap will be the maximum charge allowed by law; each dealer can make their own determination as to what amount, if any, to charge based on their own circumstances.
The modified processing charge cap language is covered in Section 15-311.1(b)(3) of the state budget, located on page 63.Download Bulletin PDF