Under legislation passed without the governor’s signature, software and software-as-a-service sold or licensed for business use in Maryland will no longer be considered taxable digital products for the purposes of sales and use taxes.
A product with electrical, digital, or similar capabilities will not be defined as a taxable digital product if the purchaser has a copyright or similar interest in it and uses it purely for business purposes, according to the law. If purchased or licensed primarily for business reasons, software, including software as a service, is also not a taxable digital product under the bill.
For more information regarding the Maryland bill, please see House Bill 791.
The bill goes into effect on July 1st, 2022.