Is Bottled Water Taxed in Maryland?

Understanding Maryland’s tax laws can save you time and money, especially when it comes to everyday essentials like bottled water. While it may seem straightforward, whether or not bottled water is taxed depends on how and where it’s purchased.

When Bottled Water Is Tax-Exempt

In Maryland, bottled water is generally exempt from sales tax. This includes:

• Multipacks or cases sold in grocery stores.
• Standard-sized bottles intended for home or personal use.

These purchases are considered essential grocery items, which are typically not taxed in Maryland. If you’re buying bottled water as part of your routine shopping trip, you’re unlikely to see a sales tax added to your receipt.

When Bottled Water Is Taxable

There is one notable exception: bottled water sold in individual servings for immediate consumption is taxable. This includes:

• Bottled water sold at vending machines.
• Single bottles purchased from convenience stores or restaurants.

Maryland’s tax law treats these items as prepared or convenience goods, which are subject to the state’s sales tax. For example, grabbing a bottle of water while on the go may cost slightly more due to this tax.

Why the Difference?

The distinction between tax-exempt and taxable bottled water reflects Maryland’s broader sales tax policy. Essential grocery items, like unprepared foods, are often tax-free. However, items deemed discretionary or sold for convenience, such as snacks and beverages ready for consumption, typically incur sales tax.

Tips for Consumers

To avoid surprises:

• Purchase bottled water in larger quantities or multipacks for the best value.
• Be aware of the added cost when buying single servings on the go.

For businesses, it’s essential to comply with these rules to ensure proper tax collection and reporting.