TT-23 – Creation of other tobacco products (OTP) tax
What businesses must know about Maryland’s OTP tax and reporting requirements
Maryland created a new excise tax on other tobacco products, and this guidance explains the tax rate, who must pay it, and the reporting and registration requirements for businesses.
What you need to know
- A 15% tax applies to other tobacco products
- Wholesalers are primarily responsible for paying the tax
- Retailers and consumers may be responsible in certain cases
- Registration is required before selling OTP
Who This Applies To
This guidance applies to:
- OTP wholesalers
- OTP retailers
- Consumers possessing untaxed OTP
New Tax Requirement
Maryland established:
- A 15% excise tax on the wholesale cost of OTP
OTP includes:
- Cigars
- Pipe tobacco
- Chewing tobacco
- Snuff
Who Pays the Tax
Primary responsibility:
- Wholesalers must remit the tax
If tax is not paid:
- Retailers and consumers must file and pay the tax
This applies when:
- There is no proof that tax has been paid
Reporting Requirements
Wholesalers must:
- File monthly tax returns
Retailers and consumers must:
- File quarterly returns when applicable
Registration Requirement
Businesses must:
- Register with the state before selling OTP
This applies to:
- Wholesalers
- Retailers
There is:
- No registration fee
Filing Deadlines
- Monthly wholesaler returns are due the 21st of the following month
- Quarterly retailer/consumer returns are due after each quarter
Enforcement and Penalties
Failure to comply may result in:
- Interest on late payments
- Penalties up to 25% of the tax due
- Confiscation of untaxed products
What This Means for Businesses
Businesses should:
- Register before selling OTP
- Ensure tax is properly paid and documented
- File required returns on time
- Maintain records of tax payments
Important Notes
- Tax applies based on wholesale cost
- Responsibility may shift if tax is unpaid
- Documentation is critical for compliance
Need Help?
For questions about OTP tax, contact the Maryland Comptroller’s Office: 410-260-7980