The Maryland General Assembly overrode Governor Larry Hogan’s veto of charging the state’s sales and use tax on digital goods (H.B. 932). Effective March 14, 2021, Maryland’s 6% sales and use tax on digital goods now applies to the following (non-exclusive) digital products if obtained or delivered by electronic means:
Also effective March 14, 2021, the sale of canned or commercial off-the-shelf software obtained electronically is considered a digital good and is subject to Maryland sales and use tax. The sale of software as a service (SaaS) is also subject to sales and use tax.
In light of the increase in online learning and entertainment, it is important to note that charges for viewing or attending continuing education classes, seminars, or conferences that are delivered electronically are subject to sales and use tax. “Prerecorded or live music or performances, readings of books or other written materials, and speeches” delivered electronically are considered taxable digital products under Maryland law. (H.B. 932, Laws 2020, effective March 14, 2021 and Business Tax Tip #29 Sales of Digital Products and Digital Code, Maryland Comptroller, March 9, 2021)