Starting a service business in Maryland

Form your business in Maryland

Maryland LLCs are created at SDAT, online through Maryland Business Express or with the paper Articles of Organization. The standard fee is $100 as listed on SDAT's form revised May 2026, with processing of 6 to 8 weeks. The same form lists expedited filing at $150 with 7 to 14 business days, and same-day filing at $425 online or $525 on paper. You need a resident agent in Maryland who signs to accept the role.

Ongoing state filings

Every LLC files an annual report with SDAT each year, due April 15; for 2026, SDAT allowed a 60-day extension to June 15 if requested online by the deadline. The LLC filing fee is $300 as listed on SDAT's 2026 Form 1. The report is combined with the business personal property return. SDAT says businesses approved through MarylandSaves, the state's retirement savings program, can have the $300 annual report fee waived for each year they remain qualified.

Using a business name (DBA)

Register a trade name with SDAT for $25 as listed on SDAT's trade name application in October 2026, or $75 with expedited service. A registration lasts five years and can be renewed during the last six months; if it is not renewed, SDAT forfeits the name. SDAT advises home improvement companies to check the name with the Home Improvement Commission (410-230-6171) before registering it.

Not sure whether you need an LLC at all? Read LLC vs sole proprietor for contractors, then get your free EIN from the IRS.

Licensing for service trades

The Maryland Home Improvement Commission (MHIC), in the Department of Labor, licenses contractors and salespeople for home improvement, which state law defines as adding to, altering, improving, repairing or replacing a residence or adjacent structure, or improving land next to it. The commission's list of work that usually needs a license includes painting, gutters, roofs, siding, fences, decks, driveways (gravel included), patios, retaining walls, sealants, waterproofing, windows, doors and flooring other than carpet. Its FAQ says carpet cleaning, chimney cleaning, demolition and clean-up only, and interior window treatments do not. New homes are different: builders register with the Attorney General's Home Builder Registration Unit. Electricians, plumbers and HVACR contractors are licensed by their own boards, and the Department of Agriculture's Pesticide Regulation Section certifies pesticide applicators.

• Maryland Home Improvement Commission (MHIC): Home improvement contractor and salesperson licenses
• Maryland State Board of Electricians: Electrician licenses
• Maryland Board of Plumbing: Plumbing licenses
• Maryland Board of HVACR Contractors: Heating, ventilation, air conditioning and refrigeration licenses
• Maryland Department of Agriculture: Pesticide Regulation: Pesticide applicator training, exams and enforcement

Workers' compensation

Under Maryland Labor and Employment Article 9-402, each employer must secure compensation for all covered employees by maintaining insurance with an authorized insurer, joining an approved self-insurance group, or self-insuring individually with approval. The Workers' Compensation Commission administers the law. Line up a policy before your first employee's first day, and keep certificates from any subcontractors you use.

More on coverage: business insurance for contractors.

Sales tax on services

Maryland's sales and use tax rate is 6% under Tax-General Article 11-104. It applies to goods and to the taxable services listed in Tax-General 11-101(m). Most home services are not on that list, but one that matters is cleaning of a commercial or industrial building, defined as floor, carpet, wall, window, ceiling and exterior cleaning plus janitorial services. That means a pressure washing, window cleaning or janitorial company serving businesses collects sales tax on that work, while the same service at a house is not on the list. Security system services and telephone answering services are also listed. Register for a sales and use tax license with the Comptroller through Maryland Business Express.

Recording business calls in Maryland

Maryland is all-party consent. Courts and Judicial Proceedings Article 10-402(c)(3) makes recording lawful only when the person recording is a party and all parties have given prior consent. Have every greeting, human or AI receptionist, say up front that the line is recorded; see our guide to recording business calls for a short script.

See our guide to recording business calls before you turn on call recording or an AI receptionist.

How the seasons shape the work

Maryland packs several climates into a small state. The Chesapeake and Eastern Shore have humid summers that grow lawns, mildew and mosquitoes, while Garrett and Allegany counties in the western mountains get real snow seasons. The Baltimore and Washington suburbs see a few plowable storms most winters and long spring and fall seasons for exterior painting, washing and hardscape work, nearly all of which falls under MHIC licensing when it is done on a home.

Door-to-door sales and the five-day cancel

The MHIC's FAQ notes that when a homeowner is approached at home and sold a home improvement job, the Maryland Door-to-Door Sales Act lets the buyer cancel until midnight of the fifth business day after the sale, or the seventh day if the buyer is 65 or older. If you sell sealcoating, washing or repairs by knocking on doors, build that cancellation period into your scheduling and deposits.

Then set up the back end that gets you hired

The paperwork makes you legal. Customers still have to find you, reach you and pay you. Before your first job, set up a business phone number, email on your own domain, a Google Business Profile, a simple website, and a way to send quotes and take card payments. The launch checklist lays out the order.

Maryland questions