Baltimore
Baltimore City's local income tax is 3.20% for payments made on or after January 1, 2026, per the Comptroller of Maryland's 2026 withholding memo. It's a tax on City residents, withheld together with Maryland state tax, and the City's budget office lists the same 3.2% for Fiscal 2027. On the sales side, Maryland taxes cleaning of commercial or industrial buildings at the 6% state rate, while residential cleaning isn't among the taxable services listed in the statute's 2025 legislative text, and no Comptroller statement on it was retrieved.
In Baltimore, the local income tax withheld from a cleaning company's payroll rides along with the state's. This page covers the 3.20% rate and how it's withheld, the default when no withholding certificate is on file, nonresident employees, Maryland sales tax on cleaning, the state wage, and what it all means for your books. Payroll registration and the employee test are on my Maryland page.
The Comptroller's Central Payroll Bureau memo, dated February 4, 2026, lists Baltimore City under code 04 at 3.20%, effective for payments made on or after January 1, 2026, and shows the state and local amounts together under the heading "STATE TAX." The Comptroller also publishes a 3.20 percent local income tax employer withholding table. The City's Bureau of the Budget and Management Research lists the income tax at 3.2% of a City resident's taxable income for Fiscal 2027, and the City's tax-rate list shows no city payroll or wage tax beyond it.
Two more points come from the same memo, which is addressed to State agencies as employer. An employee with no withholding certificate defaults to the highest local rate, 3.30% for 2026. For most employees who aren't Maryland residents, the 7.0% nonresident rate applies, which includes no local tax but does include the special 2.25% nonresident rate. This page doesn't cover employees who live in other Maryland counties and work in the City.
Cleaning of commercial or industrial buildings is a taxable service under Tax-General 11-101(m)(3), and the 2025 fiscal note puts the state rate at 6%. Commercial cleaning or laundering of textiles for a business buyer with a recurring need is a separate taxable item under 11-101(m)(2). Residential cleaning isn't among the enumerated taxable services in the 2025 session bill text showing current law; that answer is read from the statute's list, since no Comptroller statement on it was retrieved. The detail is on my Maryland sales tax page.
Source: Maryland Department of Legislative Services, Fiscal and Policy Note, SB 1045 (March 11, 2025)
This page doesn't cover a Baltimore City minimum wage. Maryland's statewide rate 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.
Source: Maryland Department of Labor, Maryland Minimum Wage and Overtime Law poster (revised 9/1/2026)
Because the City tax travels inside the state withholding line, the books only see it if payroll is set up to track it. A payroll app that lets a new hire through without a withholding certificate on file? It's the worst gap to leave open, because the memo's default is the highest local rate, 3.30%, not Baltimore's 3.20%. State and local withholding sit in a liability account until they're paid. Commercial building cleaning and residential cleaning go on separate income lines, with collected sales tax held as a liability, and payroll is recorded at the wage actually paid, as my payroll page explains.
I'm a bookkeeper, not a CPA or an Enrolled Agent. I keep the withholding and the sales tax recorded and separate; which rate applies to each employee, which jobs count as commercial building cleaning, and how each return gets filed are questions 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 Baltimore 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
For Baltimore, residential and commercial building cleaning sit on separate income lines, and the sales tax collected on the commercial side is held as a liability, not income. State and City withholding go together into their own liability account. Book a short call below and tell me how your Baltimore jobs are set up.
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
Cleaning in Baltimore and not sure the City tax is coming out at the right rate? Show me how a recent payroll ran. The first conversation doesn't cost anything.
