For companies that do business in Maryland, two important tax changes related to the sale of online products and advertising are set to go into effect:
On March 14, Maryland will change the definition of a digital product to include receipts from electronically delivered software, remotely accessed software or SaaS, and access to online content relating to the 6 percent sales and use tax. The Maryland Comptroller’s office has issued guidance on this new tax.
Maryland also passed a new law to impose tax on annual gross revenue derived from digital advertising services in the state. The State will impose the tax at scaled rates between 2.5 and 10 percent for taxpayers with at least $100 million of global annual gross revenue. The law would also be effective March 14; however, litigation is anticipated as taxpayers could challenge the law and the General Assembly could amend it.