Montgomery County passed a new law, the Bring Your Own Bag Law that affects how your business may provide carryout bags to customers. Key changes, effective January 1, 2026, include:

• The bag tax will increase from 5 cents to 10 cents per bag (of which the retailer gets to keep 5 cents).
• Plastic carryout bags will be prohibited, though some municipalities within the county are exempt from this ban.
• Retailers must submit quarterly tax reporting and remittance of paper bag sales.

This law is applicable to all businesses and restaurants that operate in Montgomery County and offer disposable (plastic or paper) bags. Businesses located in some municipalities in Montgomery County are exempt from the prohibition on the use of plastic bags within the law.

The law also includes certain exemptions for customers paying with SNAP/WIC benefits (no bag fee), restaurants providing prepared/leftover food, takeout, and drive-through (no bag fee), and bulk or perishable items like produce, meat, fish (plastic bags allowed).

To be in full compliance by January 1, 2026, Montgomery County businesses must:

Charge 10 cents for each paper carryout bag provided at checkout

Register your business at montgomerycountymd.gov/bag/retailers.html

Stop distributing plastic carryout bags to customers (except in municipalities where this is still permitted)

File quarterly tax reports remitting 5 cents per bag to Montgomery County (the business may retain the other 5 cents)