Maryland Imposes Tax on Digital Products

Maryland – The state of Maryland has passed legislation that would impose a tax on a specifies digital products and codes effective July 1, 2020

The bill, which passed both houses of the Maryland General Assembly last week, has been sent to the governor.

Retail Sale Would Include Digital Products

“Digital products” are delivered electronically and would include:

  • prerecorded/live music, book readings, and speeches;
  • audio/video greeting cards sent by email;
  • ring tones;
  • movies, music videos, news and entertainment programs, live events, and video/ electronic games;
  • e-books; and newspapers, magazines, chat room discussions, weblogs.

Digital Codes That Are Exchanged for Digital Products Would Be Included

Digital codes would include a code (obtained in tangible form or through e-mail) that would entitle the buyer to obtain digital products. Digital codes would not include gift certificates or gift cards that could be redeemed for items other than digital products.

Sourcing Would Be Addressed

For sourcing purposes, the retail sale would be presumed made in the state in which the customer’s tax address is located. 

Press Release

About Davis Davis & Harmon LLC – Sales Tax Experts: Headquartered in Dallas, Texas, Davis Davis & Harmon LLC – Sales Tax Experts specializes in sales/use tax refund recovery and audit defense. Our team of consultants is comprised of former Big 4 sales tax consultants and state sales tax auditors. Each of our consultants has 15 to 20 years of experience, providing our clients with access to a highly specialized team of sales/use tax professionals. At Davis Davis & Harmon, LLC we are committed to maintaining the highest standards in our talent pool. We work hard to meet our clients’ needs by ensuring that you view our firm as an extension of your company and a member of your team.

For sales/use tax compliance questions or audit-related concerns, we are here to help!

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