- On May 29, 2025, the Maryland Comptroller released draft regulations for a new 3% sales and use tax on specific data and information technology services, effective July 1, 2025; this tax will apply to software as a service (SaaS), data processing, and custom software publishing, with certain exclusions.
- Contracts for services entered into before July 1, 2025, will be exempt from the tax, but any periodic payments made after this date will be taxed as separate transactions. Additionally, cloud computing sales to qualified cybersecurity businesses are exempt from the new tax.
- The draft regulations outline the use of multiple points of use (MPU) certificates for purchasers using taxable goods in multiple jurisdictions, requiring authorization from the Comptroller, while emphasizing that the structure of the existing sales tax remains unchanged. Final emergency regulations will be published on June 27, 2025, with more guidance to follow.
Source EY
Other news on Maryland
Understanding Maryland’s Sales and Use Tax: Rates, Exemptions, and Nexus Rules
Published: June 2, 2025
- Maryland imposes a 6% statewide sales and use tax on most tangible goods and certain services, with no local taxes.
- Specific items like car rentals (11.5%), truck rentals (8%), and alcoholic beverages (9%) have higher tax rates.
- Exemptions apply to sales involving exempt organizations and certain casual or isolated sales under $1,000.
- Nexus rules require businesses with a physical or economic presence in Maryland to collect and remit sales tax.
Maryland Enacts 3% Sales Tax on IT and Data Services, Effective July 2025
Published: May 29, 2025
- Maryland introduces a 3% sales tax on certain information technology and data services, effective from July 1, 2025.
- The definition of taxable services is expanded to include specific data or information technology services.
- The same sourcing rules for digital codes and products apply to these services.
- Buyers can provide a certificate for multiple points of use at purchase.
Maryland to Implement 3% Digital Services Sales Tax in July 2025
Published: May 26, 2025
- Maryland will implement a reduced 3% sales tax on digital services, including software, digital publishing, and digital products, from July 2025.
- This replaces the previous 6% digital services tax that was invalidated by state courts in 2022.
- A separate 2021 law imposes a sales tax on digital advertising services for providers earning over $1 million annually
Maryland Imposes New 3% Tax on Digital Services Starting July 2025
Published: May 24, 2025
- Governor signed House Bill 352 on May 20, 2025, introducing a 3% sales tax on data and information technology services, effective July 1, 2025.
- The tax applies to services in NAICS sectors 518, 519, 5415, and 5132, including software publishing, data processing, and web hosting.
- Businesses should review their offerings and nexus thresholds to ensure compliance before the effective date.
Maryland to Implement 3% Sales Tax on Data and IT Services Starting July 2025
Published: April 12, 2025
- Maryland’s House of Delegates adopted a budget bill introducing a 3% sales tax on data and IT services, effective July 1, 2025.
- Taxable services include data processing, hosting, IT services, web search portals, digital libraries, and software development.
- The proposal awaits Senate consideration; any amendments will require approval from the House or a conference committee.
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