Maryland IT Services Sales Tax Update
Summary
The State of Maryland is implementing a 3% sales tax on certain IT services effective July 1, 2025, as part of the Budget Reconciliation and Financing Act. Businesses are advised to review taxable services, register for necessary licenses, and prepare to collect and remit the new tax.
What changed
The Maryland Comptroller's office has issued guidance regarding new tax laws passed during the 2025 legislative session, specifically the Budget Reconciliation and Financing Act. A key change is the imposition of a 3% sales tax on certain IT services, which will take effect on July 1, 2025. Businesses are encouraged to review the updated list of taxable services and resources provided by the Comptroller to ensure compliance.
Affected businesses must take proactive steps to prepare for this change. This includes confirming which IT services are now taxable, signing up for the MD Tax Connect portal, and registering for a Sales and Use Tax (SUT) License if they have not already done so. The Comptroller's office has also provided a checklist and webinars to assist businesses in understanding and implementing these new tax collection and remittance requirements. Failure to comply could result in penalties.
What to do next
- Review the list of taxable IT services.
- Register for an SUT License via MD Tax Connect.
- Prepare to collect and remit the 3% sales tax on applicable IT services starting July 1, 2025.
Source document (simplified)
Tax Updates from the 2025 Legislative Session
During the 2025 legislative session, the Maryland General Assembly passed the Budget Reconciliation and Financing Act (PDF) (BRFA), which makes several changes to Maryland’s tax laws beginning in the 2025 tax year and beyond. Some Maryland Businesses may need to make changes to how they collect Sales and Use Taxes ahead of July 1, 2025. Please review our "Get Ready" Checklist below, and check out the additional resources on this page, to ensure you and your team are prepared for these changes.
Get Ready Maryland Businesses Checklist
On July 1, some Maryland businesses will be required to collect a 3% sales tax on sales of certain IT services.
Here are a few things you can do to make sure your business is ready:
- Confirm taxable services (PDF)
- Sign up for MD Tax Connect
- Register for an SUT License
- Preparing Taxes - DIY vs CPA
- Prepare to remit This page will be updated regularly with detailed information, official guidance, and resources to assist taxpayers, businesses, and tax professionals to understand and comply with these changes.
Webinars
Chose from a variety of webinars that will assist you in navigating the new sales and use tax, income, and other regulatory changes brought by the General Assembly during the 2025 legislative session.
Introduction to 2025 Tax Changes Maryland Tax Changes 2025 Sales and Use Tax Changes Income Tax Changes Maryland Tax Connect All Webinars Related to 2025 Tax Changes Register a Business File an SUT Return Maryland Tax Connect and SUT Filing Demo
Questions and Answers on New Taxable Services
Updated 6/10/25
The Comptroller has issued Technical Bulletin 56 - Questions and Answers on New Taxable Services (PDF). The Technical Bulletin contains questions and answers on the application of sales and use tax to data or information technology services and system software or application software publishing services, as imposed by Section 4 of Chapter 604 of the Acts of 2025.
Relevant Documents
- Proposed Amendments – New Tire Fee And Tire Recycling Fee (PDF)
- Technical Bulletin 58 (PDF) - Maryland Taxation of Individual Capital Gain
- Technical Bulletin 61 (PDF) - Tire Fees
- Tax Alert (PDF) - Changes to Standard and Itemized Deductions and to State and Local Income Tax Rates from the 2025 Legislative Session
- Proposed Amendments and New Regulations – Sales and Use Tax (PDF)
- Proposed Amendments – Digital Advertising Gross Revenues Tax (PDF)
- Proposed Amendments – Inspection of Public Records (PDF)
- 2025 Tax Changes Flyer (PDF)
- Technical Bulletin 54 (PDF) - Multiple Points of Use Certificates
- Technical Bulletin 56 (PDF) - Questions and Answers on New Taxable Services
- Emergency Sales and Use Tax Regulations (PDF)
- Tax Alert (PDF) - Gambling Winnings and Your Maryland Tax Obligations
- Sales and Use Tax Alert- Updates 2025- 2026 (PDF)
- Tax Updates from the 2025 Legislative Session-Webinar Slides (PDF)
Guides
- Business Registration Guide (PDF) – This is the user guide for completing a Combined Registration Application.
- Maryland Tax Connect Registration and Linking Tax Accounts Guide (PDF) – User guide to set up Maryland Tax Connect account.
- File a Form and Pay As a Registered User Guide (PDF) – File and Pay SUT user guide.
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