Sales Tax Policy

1) "Drop shipping" refers to the common business practice in which a vendor, often in a different state, makes a sale of a product that is shipped to the end-user by a third party supplier hired by the initial vendor. In Maryland, drop shipments are generally exempt from sales taxes.  In the state of Maryland, the laws regarding tax on shipping and handling are pretty simple. The state does not usually require a sales tax on the shipping costs.  As long as the shipping costs are stated separately on the invoice, no tax on the value is necessary.  However, if the cost is included in the shipping price, then the shipping cost is considered to have become a part of the total taxable transaction.  In this case, the shipping charge loses an exemption and is taxable. (paraphrase)

2) Considering the above statement and Maryland Tax Registration, sales tax rates are automatically calculated and applied to orders.