How to Get a Maryland Business License (and What Changes as an S Corp)

Understanding Maryland business licensing can feel overwhelming for solopreneurs, but the right guidance makes the process much easier.

Starting a business in Maryland comes with plenty of questions, especially when it comes to understanding which licenses you actually need. Between state requirements, local rules, and industry‑specific regulations, it’s easy to get stuck wondering what applies to you and what doesn’t.

This guide breaks down Maryland’s business license requirements in simple terms, so you can move forward with confidence. You’ll learn the differences between service providers and product sellers, what S Corps must register for, and how to complete essential steps like tax registration.

If you’re looking for a faster way to stay compliant, Lettuce can automate your S Corp setup, tax accounts, payroll, and ongoing filings. It handles the complex admin work so you can stay focused on running your business.

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Do Solopreneurs Need a Business License in Maryland?

Maryland doesn’t require every solopreneur to get a license, but many do depending on what they sell, where they operate, and whether their field is regulated. The big pattern: selling goods and working in regulated professions are the main triggers, while pure service providers often don’t need a trader’s license at all.

Always double-check with your local Clerk of the Circuit Court or the state board that regulates your industry.

Here’s a quick way to think about it:

• You often don’t need a Maryland trader’s license if:

  • You only provide services (like design, marketing, consulting, or fractional roles) and you don’t sell physical products or keep inventory. You still report your income for tax purposes, but there usually isn’t a separate trader’s license just for offering services.

• You likely do need a Maryland business license or registration if:

  • You sell physical products online, at pop-up markets, or in a shop, and need a trader’s license plus a Maryland Sales and Use Tax license.

• • You sell at events, craft fairs, or markets as a temporary or transient vendor, which can trigger a trader’s license and tax registration even if you only sell occasionally.

  • You operate in construction or skilled trades that fall under Maryland’s Home Improvement Commission or other boards, where licensing is expected before you start work.

Step‑by‑Step: How to Get a Maryland Business License as a Solopreneur

Here’s a simple checklist you can follow as a Maryland solopreneur, whether you’re just starting or gearing up for an S Corp election.

Step 1: Choose Your Structure and Register With SDAT (If Needed)

Decide how you want to operate:

• Sole proprietor under your own name (simplest path, no state formation)

• Single‑member LLC if you want liability protection and a more formal business structure

If you form an LLC or corporation, you’ll register with the State Department of Assessments and Taxation (SDAT). Some sole proprietors also register a trade name so they can operate under a business name instead of their personal name.

Step 2: Get Your EIN

Next, get your Employer Identification Number (EIN) from the IRS. It’s free, and you’ll need it for:

• Opening a business bank account

• Filing the Maryland Combined Registration Application

• Electing S Corp status later on

Step 3: Use the Combined Registration for Tax Accounts

Once your entity (if any) and EIN are in place, use Maryland’s Combined Registration to set up:

• Sales and Use Tax (if you sell taxable goods or services)

• Employer withholding tax (if you run payroll as an S Corp)

• Unemployment insurance (for employees, including you as an S Corp owner‑employee)

This online application streamlines what used to be separate forms with multiple agencies. Processing can take around two weeks, including time for your account numbers and letters to arrive by mail.

Step 4: Apply for a Trader’s License If You Sell Goods

If you sell physical products, you’ll apply for a trader’s license through your county’s Clerk of the Circuit Court. A few key points:

• Fees are based on your average inventory value, not your revenue

• Service‑based solopreneurs typically report minimal or no inventory

• Baltimore City fees can run higher than those in other counties

Step 5: Add Any Professional or Board Licenses

If your industry is regulated, like home improvement, health care, real estate, or certain design fields, you’ll need to secure the right professional license before you launch or advertise your services. Check the relevant Maryland board or the Department of Labor for your field.

Step 6: Stay on Top of Renewals and Good Standing

Maryland business/trader licenses typically run from May 1 through April 30, no matter when you start your business. Renewals often require tax clearance from multiple agencies, meaning they confirm you're up to date on your filings and payments.

Staying organized with your:

• Sales and Use Tax returns

• Payroll tax deposits

• Annual reports and personal property returns (for LLCs and corporations)

helps you avoid last‑minute headaches and keeps your licenses and S Corp election in good standing

Penalties for Operating Without a Business License in Maryland

Operating a business in Maryland without a required license can lead to real legal and financial consequences.

Under Maryland law, you may not do business in the state if a license is required for that activity and you don’t have the appropriate license. In many cases, operating without a business license or required sales and use permit is treated as a misdemeanor offense.

Potential consequences can include:

• Fines and criminal charges. Running an unlicensed business can lead to fines of up to $1,000 per offense and, in some cases, short-term jail time, depending on the violation and how long it continues.

• Each day can count as a separate violation. If you keep operating without the proper license, every day you stay out of compliance can be treated as a separate offense.

• Back taxes, interest, and penalties. You may be required to pay back sales tax, interest, and penalties for periods when you should have been licensed.

• Business disruptions. The state can block license renewals, confiscate an existing license, or order you to stop operating until your account is brought into compliance.

• Longer look‑back periods. Officials can review delinquent license matters going back several years, which can compound what you owe if you’ve operated unlicensed for a long time.

The bottom line is simple: it’s far cheaper and less stressful to confirm your licensing requirements up front, and keep everything current, than to fix problems once you’re already on the state’s radar.

What Changes When a Solopreneur Elects an S Corp in Maryland

Electing S Corp status is mostly a tax decision. It doesn’t change what you do day‑to‑day or suddenly create new licenses; your requirements still depend on what you sell and where you work. What does change is how you pay yourself and which tax accounts you need.

What Stays the Same

Most Maryland business license rules don’t care whether you’re taxed as an S Corp or not:

• If you needed a trader’s license before electing S Corp, you still need it after.
• If you didn’t need a license as a pure service provider, electing S Corp doesn’t suddenly create one.
• Professional or board licenses stay the same regardless of your tax election.

Your work drives your license requirements. S Corp status just changes how your income shows up on your tax return.

What’s New With an S Corp Election

As an S Corp owner, you’ll usually pay yourself a salary through payroll instead of taking only owner draws. Once you’re paying yourself wages, Maryland treats you as an employer, and you’ll need:

• A Maryland employer withholding tax account

• Maryland unemployment insurance accounts

You set these up through the free Combined Registration Application, which lets you register for Sales and Use Tax, withholding, and unemployment in one place once you have your EIN.

This is precisely the point where S Corps start to feel “too complex” for a lot of solopreneurs. Suddenly, you’re juggling payroll, extra accounts, and more deadlines.

Lettuce bundles S Corp election, payroll registration, and ongoing filings into one automated workflow so you’re not tracking separate deadlines across multiple agencies or paying hourly for a piecemeal solution.

Maryland Business License: Frequently Asked Questions (FAQs)

Stop second-guessing your licensing requirements. Here are some of the most common questions about Maryland business licenses, with real costs and clear action steps so you can focus on growing your business instead of wondering if you're compliant.

Do I need a Maryland business license to work as a freelancer or independent contractor?

Service-based freelancers often don’t need a Maryland trader’s license, especially if they don’t sell physical products or keep inventory. Many pure service providers aren’t in the categories that require a trader’s license, but requirements can still vary by county and profession, so it’s smart to confirm with your local Clerk of the Circuit Court or your state licensing board.

What are the Maryland business license requirements for S Corps, including payroll accounts?

S Corps registers for Maryland withholding accounts through the Comptroller’s Combined Registration Application so you can collect and remit payroll taxes through the correct accounts. Lettuce manages the registrations, payroll runs, and required filings for you, so your S Corp admin feels manageable from day one

How much does a Maryland business license cost for a single-member LLC or S Corp?

Trader's license fees start at $15 and scale to $800 based on inventory value, plus a $2 issuing fee. Baltimore City's maximum reaches $2,125. Pure service businesses that don’t sell goods or hold inventory often don’t need a trader’s license at all, though you may still need professional or local permits depending on your field and county.

When do Maryland business licenses expire, and how do renewals work?

Maryland business licenses run from May 1 through April 30, regardless of your start date. Renewals require tax clearance verification from multiple agencies, including the Comptroller, Department of Labor, and others, to confirm you're current before approving renewal. This information is shared by the departments directly, and you don’t need to obtain any verification yourself. Stay ahead by maintaining good tax standing year-round.

Can I apply for a Maryland business license online?

In many cases, you can start your Maryland license application online through the state’s Business Express or Judiciary eLicense portals, then complete the process with your local Clerk of the Circuit Court if required. Some counties still require you to apply directly with the clerk’s office, so always follow the instructions for your specific jurisdiction.

Make Maryland S Corps Simple for Solopreneurs

Maryland licensing used to mean juggling multiple vendors, missing deadlines, and guessing at compliance. Today's solopreneurs get enterprise-level automated systems that handle formation, tax elections, and ongoing filings without the paperwork chaos. Your creative work deserves the same strategic advantages that big businesses access through their accounting teams.

Maryland solopreneurs no longer need to treat S Corps as something out of reach. What used to involve complex forms, scattered tax accounts, and guesswork can now be handled through a far more streamlined, predictable process.

Ready to run your business like an enterprise without the admin burden? Calculate your potential savings and see how the automated S Corp setup works for Maryland creatives at Lettuce.