Definition will change for a taxable ‘digital product’ in Maryland
HB 791 updates the definition of a taxable “digital product” in Maryland. And good news: Computer software and other services your company may purchase won’t be taxable once the bill’s in effect.
Effective July 1, 2022, the following applications are specifically not subject to sales and use tax, per the bill:
- A product with electrical, digital, magnetic, wireless, optical, electromagnetic or similar capabilities where the customer holds a copyright or other intellectual interest in the product, as long as the customer uses it solely for commercial purposes (including marketing or advertising), and
- Computer software or cloud-based applications purchased or licensed solely for commercial purposes in an enterprise computer system, including operating programs or application software exclusively for the enterprise software system, that are housed or maintained by the customer on a cloud server. (The software can be hosted by the customer, a software vendor or another third party.)
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