The Maryland Comptroller of the Treasury has provided businesses with additional clarity on some of the tax changes made by HB 791, which recently updated the definition of a “taxable digital product.”
In the latest revision of the state’s Business Tax Tip #29, the comptroller states what an “enterprise computer system” includes, since these systems are specifically exempt from sales tax under the new bill – but the bill itself didn’t define what they are.
Per the state comptroller, an enterprise computer system would include:
- a set of software packages working together as an interconnected network
- a purchase or license of computer software for simultaneous use on multiple computers housed or maintained on an enterprise server, cloud server, or end users’ computers, or
- software designed to run a computer system, an operating program, or application software.
The tax tip specifically noted that if a business purchases software that isn’t designed for multiple users, doesn’t operate with a different business software solution or doesn’t interact with multiple computers, it’s not considered an enterprise computer system. So it would be subject to sales and use tax.
