- Maryland’s new tech tax imposes a 3% sales tax on digital services starting July 1, 2025.
- Affected services include software publishing, computing infrastructure, data processing, and web hosting.
- The tax applies to NAICS sectors 518, 519, 5415, and 5132.
- The definition of taxable services now includes media or software rights licensing.
- Libraries, archives, web search portals, and custom computer programming are also affected.
- The 3% tax applies only if no higher rate is in effect; otherwise, the higher rate prevails.
- Businesses must review product offerings and nexus thresholds to determine tax obligations.
- No exemption for sales to affiliated companies; the tax applies to the taxable price.
- Buyers can use an MPU certificate to shift tax obligations if services are used inside and outside Maryland.
- Each MPU certificate must report the allocation of use in Maryland.
Source: salestaxinstitute.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
