How to Open a Restaurant in Maryland: Health License, Alcohol and the Trader's License Exemption

Opening a restaurant in Maryland requires navigating multiple licensing agencies, health departments, and alcohol boards. The process is more complex than simply registering your business with the state, because restaurants operate under a specific regulatory framework. Maryland's rules also changed recently: as of October 1, 2024, many restaurants no longer need a trader's license if they stay below a 10% threshold on nonfood sales. This guide walks you through every permit you actually need, the order to get them, and the costs and timelines involved.

What Maryland Counts as a Restaurant (and Why It Matters)

Maryland law defines a restaurant as an establishment that accommodates the public, provides seating for patrons, and has food preparation facilities on site (Business Regulation 17-1601). This definition covers full-service restaurants, limited-service establishments (including fast-casual and quick-service), and ghost kitchens only if they include seating. A commissary or catering kitchen without a public dining area does not fall under the restaurant license requirement.

As of 2024, Maryland has 5,177 private limited-service restaurant establishments and 3,861 full-service restaurant establishments, according to the Bureau of Labor Statistics. This is a competitive market, but the licensing process is predictable if you know the sequence.

Exception for Montgomery County: Montgomery County is excluded from the state restaurant license requirement by Business Regulation 17-1602. Montgomery County has no county restaurant license, and its restaurants still need a trader's license. If you are opening in Montgomery County, confirm the county food service licensing steps with the county health department.

The Five Permits You Need (Or Fewer, Depending on Your Sales Mix)

Before you open your doors, you need five separate permits or licenses:

1. Sales and Use Tax License (Comptroller of Maryland, free)
2. Health Department Food Service Facility License (your county health department, fee varies by county)
3. State Restaurant License (Clerk of the Circuit Court in your county, fee and timeline vary)
4. Trader's License (Clerk of the Circuit Court, May 1 to April 30 license year, fee varies by county). Exemption: If your licensed restaurant has 10% or less of annual sales from nonfood items, you do not need a trader's license as of October 1, 2024. If your nonfood sales are above 10%, you must have both the restaurant license and the trader's license. Montgomery County restaurants need a trader's license in all cases, regardless of the nonfood percentage (Comptroller Technical Bulletin 50, Business Regulation 17-1803(d)(4)).
5. Alcohol License (your county or city alcohol board, if you plan to serve beer, wine, or spirits). Maryland has 25 local alcohol boards across the state, each with its own application process, fees, and approval timeline.

You must also hire or designate a Certified Food Protection Manager to oversee food safety compliance. This person must hold a valid food protection manager certification from an accredited program (such as ServSafe Food Protection Manager). Confirm with your county health department how often the manager must be on site.

Step-by-Step: How to Get Each License

Step 1: Obtain Your Sales and Use Tax License (Free, Online)

You cannot get a trader's license or a restaurant license without proof that you have applied for a Sales and Use Tax License from the Maryland Comptroller. This license is free and can be obtained through the Combined Registration Application.

How to do it:

• Go to https://businessexpress.maryland.gov/start/taxes-and-insurance
• Complete the Combined Registration Application, which also registers you for income tax withholding and other required taxes.
• You will receive your Sales and Use Tax License once the Comptroller approves your application.
• Keep a copy of this license. You will need it when you apply for your trader's license and restaurant license.

Timeline: Confirm current processing time with the Comptroller.

Step 2: Apply for a Health Department Food Service Facility License

Every restaurant must obtain a Food Service Facility License from the health department in the county where you will operate. This license confirms that your kitchen meets sanitation, ventilation, and equipment standards.

How to do it:

• Contact your county health department's food service licensing division. They are listed on your county's website under "Health Department" or "Environmental Health."
• Request an application for a Food Service Facility License.
• Submit the application with plans for your kitchen layout, equipment, ventilation system, and water/waste disposal.
• Pay the license fee (amount varies by county and is not standardized across Maryland; contact your county for the exact fee).
• Schedule a pre-opening inspection of your facility.
• Correct any deficiencies identified during the inspection.
• Receive your final food service facility license.

What you need for the application:

• Proof of your Sales and Use Tax License
• Proof of occupancy or lease agreement for your restaurant space
• Detailed kitchen layout and equipment list
• Your certified food protection manager's name and certification number
• Menu or description of foods you will prepare
• Water source and waste disposal plan

Timeline: 2 to 8 weeks, depending on whether your initial inspection identifies deficiencies. Budget for at least one inspection visit, plus time to correct any issues found.

Cost: Verify with your county health department; fees vary by facility size and type of service.

Step 3: Apply for Your State Restaurant License (Except Montgomery County)

Once you have passed your health inspection, apply for your Restaurant License from the Clerk of the Circuit Court in your county. This is a separate application from the trader's license.

How to do it:

• Visit or call the Clerk of the Circuit Court's business licensing office in your county.
• Request an application for a Restaurant License under Business Regulation 17-1601.
• Submit the application with proof of your Food Service Facility License and your Sales and Use Tax License.
• Pay the restaurant license fee (amount varies by county).
• The Clerk will issue your license once all requirements are met.

What you need:

• Proof of Sales and Use Tax License
• Proof of county Food Service Facility License
• Proof of ownership or lease agreement
• Description of the establishment (full-service, limited-service, etc.)

Timeline: 1 to 4 weeks, depending on your county's processing time.

Cost: Contact your county Clerk's office for the exact fee.

Step 4: Determine If You Need a Trader's License (The 10% Rule)

This is where Maryland's rules simplified for many restaurants on October 1, 2024.

If your restaurant has a valid state Restaurant License and your nonfood sales (merchandise, gift cards, branded apparel, etc.) are 10% or less of annual sales: You do not need a trader's license. Your restaurant license alone is sufficient.

If your nonfood sales are above 10% of annual sales: You must obtain both the restaurant license (which you now have) and a trader's license from the Clerk of the Circuit Court.

If you are in Montgomery County: You must obtain a trader's license regardless of your nonfood sales percentage.

How to apply for a Trader's License (if needed):

• Visit the Clerk of the Circuit Court in your county.
• Request an application for a Trader's License.
• Submit the application with proof of your Sales and Use Tax License.
• Pay the trader's license fee (varies by county).
• The license is issued for the fiscal year May 1 through April 30.

Timeline: 1 to 2 weeks.

Cost: Varies by county. Contact your Clerk's office for the current fee.

Step 5: Apply for an Alcohol License (If Serving Beer, Wine, or Spirits)

If you plan to serve beer, wine, or liquor, you must obtain a license from your county or city alcohol board. Maryland has 25 separate alcohol jurisdictions, and each one has its own requirements, fees, and approval process. There is no single state alcohol license; approval must come from your local board.

How to do it:

• Identify which alcohol board has jurisdiction over your restaurant's location (usually your city or county; check your county government website).
• Contact the alcohol board and request an application for the type of license you need (on-premises beer and wine, on-premises full liquor, or both).
• Submit the application with proof of ownership or lease, proof of your restaurant license, and any required background checks or community impact statements.
• Pay the application fee and the annual license fee (both amounts vary by jurisdiction).
• Attend a public hearing if required by your local board (many jurisdictions require this; some do not).
• Receive approval from the alcohol board and your license.

What you need:

• Proof of ownership or current lease agreement
• Proof of your state Restaurant License
• Personal background information (ownership and management names, addresses, backgrounds)
• Floor plan showing bar/service area and seating
• In some jurisdictions, proof of community support or a statement addressing local concerns

Timeline: 4 to 12 weeks, depending on the jurisdiction. Some boards approve applications in 30 days; others require a public hearing, which can extend the process to 3 months or longer.

Cost: Application and annual license fees vary by jurisdiction and license type. Contact your local alcohol board for exact costs.

Costs and Timelines: What to Budget

Here is a realistic cost and timeline summary for opening a restaurant in Maryland:

License or Permit	Cost	Timeline
Sales and Use Tax License	Free	Confirm with the Comptroller
Food Service Facility License (county)	Varies by county (verify with your health department)	2 to 8 weeks
State Restaurant License	Varies by county (verify with your Clerk's office)	1 to 4 weeks
Trader's License (if needed)	Varies by county (if applicable)	1 to 2 weeks
Alcohol License (if applicable)	Varies by jurisdiction and license type (verify with your local alcohol board)	4 to 12 weeks
Certified Food Protection Manager Certificate	Varies by course provider	1 to 2 weeks

Total: Licensing costs and timelines depend on your county and whether you serve alcohol, so confirm each fee and processing time with the agency that issues the license.

After You Receive Your Licenses: Ongoing Requirements

Your restaurant must comply with ongoing state and local regulations:

• Food Service Facility License: Renewed annually by your county health department. Your facility is subject to inspections on the schedule your county health department sets.
• Trader's License (if you have one): Renewed annually every May 1 through April 30.
• Alcohol License (if applicable): Renewed annually or every two years, depending on your jurisdiction's rules. You may be required to demonstrate continued compliance with local alcohol laws.
• Certified Food Protection Manager: Your manager's certification is valid for 5 years and must be renewed before expiration. You must always have a current manager on staff or on call.
• Sales Tax and Income Tax: You must file sales tax returns and payroll tax withholding according to Maryland Comptroller rules. As of 2026, Maryland's state income tax rate is 2% to 6.5% (graduated), plus a county tax of 2.25% to 3.30%. Your sales tax obligation is 6% on prepared food and nonalcoholic beverages (alcoholic beverages are taxed at 9%).

Common Mistakes to Avoid

• Applying for licenses out of order. You must have your Sales and Use Tax License and Food Service Facility License before you can apply for your restaurant license. Starting with the wrong agency wastes time.
• Assuming the trader's license is automatic. Many restaurant owners still obtain a trader's license even when they don't need one under the 10% rule. Confirm with your Clerk's office whether you qualify for the exemption before paying for a license you don't need.
• Underestimating alcohol board timelines. If your jurisdiction requires a public hearing on your alcohol application, budget 3 months, not 4 weeks. Submit your application as early as possible.
• Ignoring the nonfood sales threshold. If you operate above the 10% nonfood threshold and did not obtain a trader's license, you are operating in violation. Calculate your actual nonfood sales percentage and adjust your licensing status accordingly.
• Forgetting the certified food protection manager. Your facility cannot pass its final health inspection without a current food protection manager identified in your application. Do not delay hiring or certifying your manager.

Where to Get Help and Verify Specific Fees

Because license fees, timelines, and some requirements vary by county, contact your specific county agencies before submitting applications:

• Health Department Food Service Licensing: Search your county government website for "Health Department" or "Environmental Health" and ask for the Food Service Unit.
• Clerk of the Circuit Court: Your county Clerk's office handles restaurant licenses and trader's licenses. Fees and timelines vary significantly by county.
• Alcohol Board: Search your city or county government website for "Alcohol Board" or "Liquor Control Board." Maryland's 25 jurisdictions have different names and processes.
• Maryland Comptroller: For tax licenses and general tax questions, visit https://www.marylandcomptroller.gov/
• Sales Tax Permit: https://businessexpress.maryland.gov/start/taxes-and-insurance

Final Checklist Before You Open

• ☐ Sales and Use Tax License obtained
• ☐ Food Service Facility License obtained and final inspection passed
• ☐ State Restaurant License obtained (or Montgomery County equivalent)
• ☐ Trader's License obtained (if applicable to your county and sales mix)
• ☐ Alcohol License obtained (if serving alcohol)
• ☐ Certified Food Protection Manager named and current certification verified
• ☐ Kitchen equipment installed and meets health code requirements
• ☐ Staff trained on food safety and alcohol service (if applicable)
• ☐ All licenses displayed in your facility as required by law
• ☐ Sales tax account set up and first return due date marked

Important Disclaimer

This article is informational only and does not constitute legal or tax advice. Licensing requirements, fees, and timelines vary by Maryland county and can change. Before submitting any applications, verify the current requirements and fees with your county Clerk's office, health department, alcohol board, and the Maryland Comptroller. Consult a business attorney and a CPA if you need advice on the structure of your business, tax obligations, or compliance with specific regulations.