Maryland Enacts Electronic Filing Requirement for Sales and Use Tax and Other Taxes

Effective for tax periods beginning in 2027 (i.e. periods beginning after December 31, 2026), Maryland will require electronic filing of tax returns for the following tax types:

• Sales and Use Tax
• Motor Fuel Tax
• Tobacco Tax
• Digital Advertising Gross Revenues Tax
• Admissions and Amusement Tax
• Alcoholic Beverage Tax
• Tire Recycling and Bay Restoration Fee

The legislation does provide certain exceptions to the electronic filing requirement. A person is not required to file electronically if:

• The person has a disability, as defined in the Americans With Disabilities Act;
• The person has religious beliefs that prohibit the use of electronic filing technology; or
• The person is determined by the Comptroller to have a special need to file via paper.

The legislation also states that effective January 1, 2030, a tax return preparer or a software company may not charge a separate fee for the electronic filing of authorized tax documents. A software company may not sell a version of its tax software that charges a separate fee for the electronic filing of authorized tax documents and a version of the same tax software that does not charge the separate fee. The legislation notes that the Comptroller of Maryland will impose civil penalties against a tax return preparer or software company for violations.

Note that the legislation also contains provisions relating to Income Tax, which are not covered here. Affected Maryland taxpayers will want to ensure that they file returns electronically for tax periods beginning after December 31, 2026, if they aren’t already. (Ch. 729 H.B. 455, Laws 2024)