Maryland’s Comptroller clarified the 3% sales tax on data, IT, and software publishing services in a Technical Bulletin issued on 10 June 2025.  

The Comptroller of Maryland clarified the 3% sales and use tax on certain data, IT, and software publishing services in Technical Bulletin No. 56, released on 10 June 2025.

The expanded sales tax base is part of the Maryland General Assembly’s plan to address a USD 3 billion Budget deficit and is expected to raise USD 500 million in fiscal year 2026.

The 3% sales and use tax goes into effect on 1 July 2025.

The bulletin titled “Sales and Use Tax on Data or Information Technology Services and Software Publishing Services: Questions and Answers” clarifies various aspects related to the imposition of a sales and use tax on data, IT, and software publishing services in Maryland under Maryland’s existing sales and use tax.

The sales and use tax applies to all retail sales unless an exemption applies, whether or not the seller makes any profit from the sale. There is no exemption for sales made to affiliated company members. The 3% rate applies to the taxable price of the service.

Section 4 of Chapter 604 of the Acts of 2025 expands the definition of services subject to the sales and use tax to include data services, information technology services, system software publishing services, and application software publishing services described in the 2022 edition of North American Industrial Classification System (NAICS), United States Manual.

The bulletin outlines the tax’s application across various services, offering definitions, examples, and hypotheticals. It covers topics such as SaaS subscriptions, instalment and credit sales, contracts with tax-exempt entities like governments, applicable exemptions, multiple point-of-use (MPU) certificates, and examples of services categorised under relevant NAICS sectors and subsectors.