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The sale of electronic data products such as software, data, digital books (eBooks), mobile applications and digital images is generally not taxable (though if you provide some sort of physical copy or physical storage medium then the sale is taxable.)
A contract to receive electronically delivered digital products, entered on December 1, 2020, is not subject to sales and use tax. The fact that the digital products are not scheduled to be delivered until April 1, 2021, and payment is not due under the contract until June 1, 2021, does not change this result.
Maryland's Office of the Comptroller issued guidance on digital products and streaming tax and announced that "software as a service" (SaaS) is taxable.
Some goods are exempt from sales tax under Maryland law. Examples include most non-prepared food items, prescription and over-the-counter medicines, and medical supplies.
As noted above, as of March 14, 2021, Maryland's sales and use tax applies to the sale of a digital product, regardless of whether the digital product is sold to the customer with rights of permanent use or less than permanent use (i.e., a rental) as well as sold as a subscription to access or stream the product.
A contract to receive electronically delivered digital products, entered on December 1, 2020, is not subject to sales and use tax.
Services Performed Electronically. 787 and COMAR 03.06. 01.01(A), Maryland excludes from taxation as digital products certain personal, professional, or insurance services that involve a sale of a digital code or digital product as an inconsequential element for which no separate charge is made.
Goods - All goods are subject to sales and use tax. This includes food, clothing, jewelry, vehicles, furniture, and art. However, there are exceptions, including: Agricultural Products Items sold/bought are not taxed if they are bought by a farmer and are being used for an agricultural purpose.
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.
Services - Only services listed in the law are subject to sales and use taxes in Maryland.