Tax insight

Maryland releases emergency rules and guidance for sales tax on technology services

Insight
5 minute read
August 05, 2025

What happened?

Update: Technical Bulletin 54 was amended on September 12 to reflect an online application process for requesting authorization to issue an MPU certificate.

Effective July 1, 2025, Maryland Chapter 604, Acts 2025 imposes a 3% sales and use tax on data services, information technology services, system software publishing services, and application software publishing services, as defined by specific NAICS codes. The Maryland Comptroller has issued emergency regulations and two technical bulletins clarifying the scope of taxable services, the tax treatment of SaaS and digital products, exemptions, the use of multiple points of use (MPU) certificates and refunds, and contracts and timing rules. [Code of Maryland Emergency Regulations 03.06.01.48; Technical Bulletin No. 56, Comptroller of Maryland (6/30/25); Technical Bulletin No. 54, Comptroller of Maryland (7/1/25)]

For more information, see PwC’s Maryland budget includes new 3% services tax, individual income tax increases, and capital gains tax.

Why does it matter?

The new tax regime applies to a broad range of services that impacts both sellers with Maryland-sourced sales and purchasers with in-state use of these services. The regulations provide an enumerated list of taxable services and new compliance obligations for MPU certificates and exemptions and clarify the tax treatment of subscriptions, contract renewals, and change orders.

Actions to take

Vendors and purchasers of technology-related services in Maryland should carefully review all data, information technology, and software service offerings to compare those items with the emergency regulations and technical bulletins for clarification regarding taxable services, software and digital products and to understand the state’s challenging positions around MPU requirements both for exemption or refund.