Maryland
Maryland taxes cleaning of commercial and industrial buildings, at a 6 percent state rate per a 2025 fiscal note, while residential cleaning is not taxable, based on 2025 legislative text rather than a Comptroller statement. The state minimum wage is $15.00 an hour, and Maryland has local minimum wages, with Montgomery County's rates rising each July 1.
Maryland splits cleaning by building. An office or an industrial building falls inside the sales tax; a home, as far as the 2025 statute text shows, falls outside it. Below I cover that split, the ABC test for workers, payroll registration, the state and local minimum wages, and what it all means for your books.
Commercial cleaning is taxable in Maryland, and Tax-General 11-101(m)(3) limits the taxable item to commercial or industrial buildings. A 2025 fiscal note puts the state rate at 6 percent. Residential cleaning is not taxable, a reading based on its absence from the enumerated taxable services in 11-101(m) as shown in 2025 session legislative text; no Comptroller statement on it was retrieved. Commercial cleaning or laundering of textiles for a business buyer with a recurring need is a separate taxable item. The detail is on my page on Maryland sales tax for cleaning services.
Source: Maryland Department of Legislative Services, Fiscal and Policy Note, SB 1045 (March 11, 2025)
Maryland uses the ABC test for unemployment insurance. The three-part test is in Md. Code, Lab. & Empl. 8-205(a), and its third prong looks at whether the work is outside the usual course of business or outside any place of business. That wording comes from a 2014 Board of Appeals decision quoting the statute; the current statute and COMAR 09.32.01.18 were not confirmed for this page. How each kind of worker shows up in the books is in 1099 subcontractors vs. W-2 employees. Whether a particular cleaner is an employee is a legal question, and it belongs with your CPA or an employment attorney.
Source: Maryland Department of Labor, Division of Unemployment Insurance, New Employers: Get Started
Source: Maryland Department of Labor, Board of Appeals, decision 21-BH-14 (April 25, 2014)
Maryland taxes wages, and the Comptroller of Maryland handles withholding, with registration through Maryland Business Express at its tax account registration page. Unemployment insurance is a separate account with the Maryland Department of Labor, Division of Unemployment Insurance, through its employer registration site.
Source: Maryland Business Express, Apply for Maryland Tax Accounts and Insurance
Source: Maryland Department of Labor, New Employers: Get Started
The Maryland minimum wage is $15.00 an hour, effective January 1, 2024, and no change to the state rate had been announced as of October 20, 2026. Maryland does have local minimum wages. Montgomery County's rates rise each July 1 by CPI, and this page doesn't list the county's figures.
Source: U.S. Department of Labor, Wage and Hour Division, State Minimum Wage Laws (updated July 1, 2026)
A commercial and residential split means one Maryland customer list can hold taxable and non-taxable work. A split like that doesn't get my trust until I've tried to break it, so I go looking for the jobs that sit near the line: textile laundering for a business with a recurring need, or a building the 2019 SB 283 exemption proposal would have reached, whose enactment wasn't confirmed from a primary source. Each kind of work gets its own income line, and sales tax collected on commercial work goes to a liability account, never income.
Labor goes in at the wage you actually pay, and Montgomery County jobs get tagged because the county's rate changes every July 1. Payroll for cleaning businesses covers how wages get recorded against the jobs.
I'm a bookkeeper, not a CPA or an Enrolled Agent. Whether a particular building or job is taxable, and how it's reported, is a question for your CPA.
Rules checked against the sources above as of October 20, 2026. Rates and rules change; confirm current figures with the agency or your CPA.
About Figure Eight Financial
Figure Eight Financial is Dave Gordon’s bookkeeping practice for residential and commercial cleaning companies. I work with owners in Maryland and across the country, and I’m a Certified QuickBooks Online ProAdvisor.
Before bookkeeping I studied computer science at Penn State and spent a career at IBM as an engineer, so I build the books as a system: data comes in once, lands in the right place, and ties back to a statement. I’m a bookkeeper, not a CPA or Enrolled Agent. I keep the books your CPA works from, and the tax decisions stay with your CPA.
Credentials and memberships reported by Figure Eight Financial.
More about DaveHow I Help
Maryland's line, as the 2025 statute text reads, runs between commercial and residential buildings, so your books carry office cleaning and home cleaning as separate income lines, with collected sales tax held as a liability. Montgomery County jobs get tagged because the county's rate moves every July 1, and payroll is recorded at the wage actually paid. Book a short call below and we'll look at how your Maryland work is split today.
The core service. Transactions recorded and categorized, every account reconciled so the books and the bank agree, and monthly reports that arrive explained, split by residential and commercial and sliceable per contract.
The full picture of how this works for a cleaning companyFor the months where nothing got entered at all. I fill in the missing periods from the ground up, pulling bank feeds, statements, and receipts until every month has a complete set of records.
How catch-up bookkeeping worksFor books that exist but can’t be trusted. I audit what’s there, fix the unreconciled accounts, duplicate transactions, and wrong categories, and tie every balance back to a statement.
How cleanup bookkeeping worksYour crews paid on time, every pay period, with each payroll run recorded in the books so labor shows up against the jobs it belongs to.
How payroll worksRecurring invoices that match your contracts, an aging report you can trust, and follow-up on slow payers handled by a process instead of your evenings. Built for net-60 commercial accounts.
How invoicing and receivables workA file built right for a cleaning company from day one, or rebuilt after the DIY version drifts, and then I teach you to run it. I’m a Certified QuickBooks Online ProAdvisor, and this is honestly my favorite part of the job.
How a proper setup worksWe start with a short call about your business and where the books stand. The first conversation doesn’t cost anything.
I take a look at what you’ve got, your QuickBooks file, your spreadsheet, whatever exists.
You get a written proposal with the price, so the decision is yours with the number in hand.
Let's Connect
If you clean offices and homes in Maryland and they share one income line, send me a note. We'll sort it out together, and the first conversation doesn't cost anything.
