What is Maryland's 3% tech tax?

Since July 1, 2025, Maryland taxes data services, information technology services and software publishing services at 3%. The covered services are those described in NAICS sectors 518 and 519 and subsectors 5132 and 5415, such as data processing, web hosting, custom programming, systems design and IT consulting. Each service is judged on what it is, not on the seller's own NAICS code.

Is SaaS taxable in Maryland?

Yes. The Comptroller's Technical Bulletin 56 says SaaS bought for use in a business's enterprise computer system is taxed at 3% as a software publishing service. SaaS bought for individual use is a digital product taxed at 6%, because Maryland applies the higher rate when two rates could apply. A buyer that uses the software both inside and outside Maryland can apportion the tax with a multiple points of use certificate.

Is food taxed in Maryland?

Groceries bought for home consumption from a store that does a substantial grocery business are exempt. Soft drinks, candy, alcohol and cannabinoid beverages are not food for this purpose and are taxed. Restaurant meals and food for immediate consumption, such as hot food, sandwiches, party platters and salad bar items, are taxed at 6%. Alcoholic drinks are taxed at 9%.

How much does a Maryland sales tax license cost?

The state charges no fee for a sales and use tax license; the law sets none. Apply through the Combined Registration Application, now on the Maryland Tax Connect portal at mdtaxconnect.gov. You need a separate license for each place of business, or for each vehicle if you sell from vehicles. You need a federal employer identification number unless you are a sole proprietor registering only for sales tax.

When are Maryland sales tax returns due?

Returns are due by the 20th day of the month after the filing period ends, or the next business day if the 20th falls on a weekend or holiday. You must file even for periods with no sales. Filing on time earns a vendor credit of 1.2% of the first $6,000 of tax and 0.9% of the rest, up to $500 a return. For periods beginning after December 31, 2026, returns must be filed electronically.

Do out-of-state sellers have to collect Maryland sales tax?

Yes, once they pass $100,000 or 200 transactions of sales delivered into Maryland in the current or previous calendar year. The count includes exempt sales and sales through marketplaces. Marketplace facilitators that pass the threshold collect on the sales they handle and must file monthly. A seller whose Maryland sales all go through facilitators doesn't need to register.

Sales tax

Maryland Sales Tax in 2026: 6% Rate, the 3% Tech Services Tax, Registration and Filing

Maryland sales tax 2026: the 6% rate, the 3% tax on data and IT services, 9% on alcohol, grocery rules, the 2026 changes, free registration and examples.

Edited by Sumeet YadavFounder & editor, MSMETOOLS · fact-checked against official sources

Updated October 2026 Verified against official sources 12 October 2026 18 min read

Maryland sales tax — MSMETOOLS guide cover

Contents (10)

1. How Maryland's sales tax works
2. The 3% tax on data, IT and software services
3. Food, restaurants and alcohol
4. What else is taxable, and what changed in 2026
5. Worked examples in dollars
6. Getting a Maryland sales and use tax license
7. Filing returns, the vendor credit and penalties
8. Remote sellers and marketplaces
9. Common mistakes and how to fix them
10. What to do next

Maryland has one of the simplest rate maps in the country: a single 6% rate and no local sales taxes at all. What changed the picture was the 2025 legislative session, which put a new 3% tax on data, information technology and software services from July 1, 2025. That tax reaches software developers, IT consultants, hosting firms and SaaS vendors that never charged sales tax before. The 2026 session then added an exemption for sales between affiliated companies and several smaller changes. This guide is for retailers, restaurants, tech companies and online sellers who need the 2026 rules with dollar examples. We checked each figure against the Comptroller of Maryland and the Maryland Code in October 2026.

Quick answer

Maryland's sales tax rate is 6% statewide, with no county or city sales taxes. Data, IT and software publishing services are taxed at 3% since July 1, 2025. Other rates: 9% on alcohol, 11.5% on short-term car rentals and 12% on adult-use cannabis.

Groceries for home use are exempt; restaurant meals and hot food are taxed
SaaS is 3% for business systems, 6% for individual use
The license is free; one per place of business
Returns are due on the 20th; timely filers earn a credit up to $500
Remote sellers register after $100,000 or 200 transactions

How Maryland's sales tax works

Maryland's sales and use tax applies to retail sales of tangible personal property, digital products and digital codes, and a list of taxable services. The Comptroller collects all of it. Unlike most states, Maryland doesn't let counties or cities add their own sales tax, so a sale in Baltimore City is taxed exactly like one in Garrett County or on the Eastern Shore. The rate depends only on what is being sold.

The rates are set in Tax-General § 11-104. The general rate is 6%. Alcoholic beverages carry 9%, though a separately stated charge for labor or other items sold with the drink is taxed at 6%. Short-term rentals of passenger cars, multipurpose vehicles and motorcycles, for 180 days or less, carry 11.5%; the statute writes it as 23 cents for every $2. Short-term rentals of certain trucks carry 8%. Adult-use cannabis rose to 12% from July 1, 2025. Electronic smoking devices are taxed at 20% and small containers of vaping liquid at 60%. Data, IT and software publishing services are taxed at 3%.

Maryland's tax is calculated with a bracket system written into the law. At 6%, that means 6 cents on each whole dollar plus a cent amount for the remainder; in practice it matches 6% rounded to the cent for nearly every price. Vending machine sales are taxed at 6% applied to 94.5% of gross receipts, which lets operators treat the tax as included in the price.

Use tax is the other half. When a Maryland business buys taxable goods or services without paying Maryland tax, it owes use tax at the same rate. Licensed vendors report it on the same Form 202 return as their sales.

Maryland sales tax at a glance (2026)

General rate

No local sales taxes

Data, IT and software services

Since July 1, 2025

Alcoholic beverages

11.5%

Short-term car rentals

12%

Adult-use cannabis

The 3% tax on data, IT and software services

Chapter 604 of the Acts of 2025, the budget reconciliation law, made a group of technology services taxable from July 1, 2025. The services are defined by reference to the 2022 North American Industry Classification System: sector 518 (computing infrastructure, data processing and web hosting), sector 519 (web search portals, libraries, archives and other information services), subsector 5132 (software publishing) and subsector 5415 (computer systems design and related services). The rate is 3%, half the general rate.

In plain terms, the Comptroller's Technical Bulletin 56 and its list of services cover things like data processing and data entry, application and web hosting, cloud storage, custom computer programming, systems integration design, software installation, IT consulting, management of a client's computer facilities, and packaged software publishing. The test is the service, not the seller. A company that reports some other NAICS code for income tax, or a government contract that lists a different code, still has to charge the tax on any service that fits the taxable descriptions. Each service on an invoice is judged separately.

SaaS sits on both sides of the line. Under Bulletin 56, SaaS bought for use in a business's enterprise computer system is a software publishing service taxed at 3%. SaaS bought for individual use is a digital product, and Maryland applies the higher rate where two could apply, so it is taxed at 6%. The 2025 law also repealed the old exemption for custom software and related services, so custom-built software is taxable too.

Contracts signed before July 1, 2025 got some relief. If the parties executed the contract before that date, installment and milestone payments under it aren't taxed, even when the work happens later. Subscriptions and automatically renewing contracts are different: each payment due on or after July 1, 2025 is a new sale and is taxed. A change order that adds new services after that date is also a new, taxable sale.

Rows of network and server equipment racks in a data center — Hosting, cloud storage and data processing fall under NAICS 518, one of the groups taxed at Maryland's 3% rate since July 1, 2025.· Image: Robert Scoble (CC BY 2.0)

Exemptions, resale and multi-state use

Normal exemptions still apply, so the federal government, the State of Maryland and nonprofits holding a Maryland sales and use tax exemption certificate don't pay the tax on purchases made for their exempt purpose. A contractor working for an exempt customer can't borrow the customer's exemption, though. Bulletin 56 is direct about this: a prime contractor that buys design or cloud services to perform a federal contract is the end user and pays the 3% tax. The resale exemption works only when the service is resold in the same form, unused, such as a hosting company buying cloud storage purely to resell as storage.

The 2025 law added three narrow exemptions: cloud computing sold to a qualified cybersecurity business, and sales to or by qualified quantum computing companies in the University of Maryland's Discovery District. The 2026 session, through Chapters 351 and 352, added a broader one from July 1, 2026: sales of these services, and of digital products and codes, between members of the same affiliated group are exempt. That reverses Bulletin 56's original statement that internal services companies had to charge tax to sister companies.

Buyers that use a service both inside and outside Maryland can present a multiple points of use (MPU) certificate, which moves the tax obligation from seller to buyer and lets the buyer pay use tax only on the Maryland share. From January 1, 2027, under Chapters 197 and 198 of the Acts of 2026, a buyer needs the Comptroller's authorization to issue MPU certificates, renewed every two years, and must give each vendor its own certificate. Vendors verify certificates through the lookup tool on MDTaxConnect.gov.

Checklist for IT and software vendors

0/6

Food, restaurants and alcohol

Maryland exempts groceries, but with conditions written into Tax-General § 11-206. Food sold for consumption off the premises is exempt when the seller runs a substantial grocery or market business at that location, defined as one where at least 10% of food sales are grocery items. Food, for this rule, includes drinks such as coffee, tea, juice and milk, plus condiments, eggs, meat, fish, poultry, fruit, grain, vegetables and sugar. It leaves out alcoholic beverages, soft drinks and carbonated beverages, candy and confectionery, and, since July 1, 2025, cannabinoid beverages. Those are taxed at their normal rates even in a supermarket.

Food for immediate consumption is taxed wherever it's sold. That category covers salad, soup and dessert bar food, party platters, heated food, sandwiches ready to eat, and ice cream or frozen yogurt in containers smaller than a pint. Restaurant meals, takeout and catering are taxed at 6%. A mandatory gratuity or service charge for serving food or drink to a group of more than 10 people is taxable at 6% too.

Maryland has a few local touches. Crabs and seafood not prepared for immediate eating are exempt when sold for consumption off the premises, so a bushel of live or steamed-to-go crabs from a seafood market isn't taxed in the way a crab cake dinner in a restaurant is. Milk, fresh fruit, fresh vegetables and yogurt sold from vending machines are exempt. From July 1, 2025, the old exemption for chips, pretzels, popcorn, nuts and similar snacks sold from vending machines was repealed, so those are now taxable.

Alcohol is taxed at 9% whether sold in a bar, a restaurant or a liquor store. A restaurant check therefore usually has two rates on it: 6% on the food and 9% on the drinks.

Steamed Maryland blue crabs dusted with seasoning on a tray — Crabs sold to take home are exempt under Maryland law; a crab feast served in a restaurant is taxed at 6%.· Image: bigbirdz (CC BY 2.0)

What else is taxable, and what changed in 2026

Tangible goods are taxable unless an exemption applies, and digital products such as downloaded music, e-books, streaming and apps are taxed at 6%. Most personal and professional services aren't taxed in Maryland, apart from the technology services above and a short list of others the law names, so a haircut, legal advice or accounting work doesn't carry sales tax.

The 2026 session made a handful of practical changes, all set out in the Comptroller's tax alert of May 27, 2026. From July 1, 2026, all sales of precious metal bullion or coins priced over $1,000 are exempt again, wherever they happen; for the year before, the 2025 law had limited the exemption to sales at the Baltimore Convention Center. Sales at in-person school book fairs run by a school or its parent-teacher organization are exempt from the same date. Construction material and warehousing equipment bought for the Mount Aetna Technology Park in Washington County can be exempt with a Comptroller certificate.

A new cash rounding law took effect on May 12, 2026, in response to the penny shortage. Merchants may round the price or the change, but not both, to the nearest nickel when a customer pays cash without exact change. The tax is always calculated on the price before rounding, so rounding never changes the tax you report.

Is it taxable in Maryland?

Sale	Rate	Why
Clothing, furniture, electronics	6%	Tangible goods
Groceries from a supermarket	Exempt	Food for off-premises use
Restaurant meal or hot deli food	6%	Food for immediate consumption
Beer, wine, liquor	9%	Alcoholic beverages
IT consulting or custom programming	3%	NAICS 5415 service
Business SaaS subscription	3%	Software publishing for enterprise use
Streaming or app for personal use	6%	Digital product
Rental car for a week	11.5%	Short-term vehicle rental
Gold coins over $1,000	Exempt	Bullion exemption from July 1, 2026
Haircut or legal fees	Not taxed	Untaxed services

Clothing, furniture, electronics

Rate: 6%
Why: Tangible goods

Groceries from a supermarket

Rate: Exempt
Why: Food for off-premises use

Restaurant meal or hot deli food

Rate: 6%
Why: Food for immediate consumption

Beer, wine, liquor

Rate: 9%
Why: Alcoholic beverages

IT consulting or custom programming

Rate: 3%
Why: NAICS 5415 service

Business SaaS subscription

Rate: 3%
Why: Software publishing for enterprise use

Streaming or app for personal use

Rate: 6%
Why: Digital product

Rental car for a week

Rate: 11.5%
Why: Short-term vehicle rental

Gold coins over $1,000

Rate: Exempt
Why: Bullion exemption from July 1, 2026

Haircut or legal fees

Rate: Not taxed
Why: Untaxed services

Worked examples in dollars

A Baltimore boutique. A shopper buys a $180 jacket and a $70 handbag. Tax at 6% on $250 is $15.00, for a total of $265.00.

An Annapolis restaurant. A table orders $90 of food and a $30 bottle of wine. Food tax is $5.40 at 6% and wine tax is $2.70 at 9%, so the check shows $8.10 of tax. For a party of 12 with an 18% mandatory service charge, that charge is taxable at 6% as well.

A grocery run in Rockville. A shopper buys $120 of groceries, a $6 case of soda and a $3 candy bar. The groceries are exempt. The soda and candy, $9 in all, are taxed $0.54.

An IT consulting firm in Columbia. The firm bills a Maryland client $20,000 for designing and building custom software in 2026. Tax at 3% is $600. If the client is a member of the same affiliated group as the firm, the sale is exempt from July 1, 2026.

SaaS subscriptions. A Maryland company pays $2,000 a month for project management software used across its business: tax at 3% is $60 a month. A consumer paying $15 a month for a personal app pays 6%, or $0.90.

A rental car at BWI. A four-day rental at $55 a day comes to $220. Tax at 11.5% is $25.30.

Try it — Maryland sales tax on $250

Purchase AmountState

Local / County Rate

Purchase Amount$250.00

State Tax (6.25%)$15.63

Local Tax (2%)$5.00

Combined Rate8.25%

Total Amount (Including Tax)$270.63

Open the full Sales Tax Calculator (PDF, save, compare)

Getting a Maryland sales and use tax license

You must hold a license before you sell taxable goods or services in Maryland, under Tax-General § 11-702. That covers in-state retailers, out-of-state vendors that meet the threshold, marketplace facilitators, and service businesses newly taxed under the 3% rules. IT firms that had never collected sales tax before July 2025 were expected to register before their first taxable sale; if you haven't, register now and work out what you owe for past periods.

The license is free; the statute sets no fee. Apply with the Combined Registration Application through the Comptroller, which has moved business accounts to the Maryland Tax Connect portal at MDTaxConnect.gov. You need a federal employer identification number unless you are a sole proprietor applying only for a sales and use tax license. The Comptroller says processing can take about two weeks. You need a separate license for each place of business, and a business that sells from vehicles with no fixed location needs one for each vehicle.

To buy inventory tax-free for resale, give your supplier a resale certificate showing your Maryland sales and use tax number. Exempt organizations present a Maryland exemption certificate card. Keep exemption records for at least four years. Our resale certificate guide covers good-faith acceptance.

Getting set up in Maryland

1
Register on Maryland Tax Connect
Complete the Combined Registration Application for a free sales and use tax license.
Open Maryland Tax Connect
2
Classify what you sell
Set tax codes for 6%, 9%, 3% and exempt items.
3
Review IT contracts
Check which services fall under NAICS 518, 519, 5132 or 5415, and whether buyers are affiliates or will send an MPU certificate.
4
File by the 20th
File every period, even with no sales, and file electronically for periods after December 31, 2026.

Filing returns, the vendor credit and penalties

Returns are due by the 20th day of the month after the end of your filing period, under Tax-General § 11-502, and move to the next business day when the 20th is a weekend or holiday. The Comptroller assigns each account its filing period. You must file for every period, including ones with no sales. Marketplace facilitators must file monthly, reporting their own direct sales on Form 202 and facilitated sales on Form 202F.

From periods beginning after December 31, 2026, Chapter 729 of the Acts of 2024 requires sales and use tax returns to be filed electronically. Exceptions are limited to people with a disability, religious objections to electronic filing, or a special need the Comptroller accepts. If you still file on paper, plan the switch to Maryland Tax Connect before your first 2027 return.

Maryland rewards on-time filers. Under § 11-105, a vendor that files on time keeps a credit of 1.2% of the first $6,000 of tax and 0.9% of the rest of the tax due, capped at $500 per return. A retailer collecting $8,000 of tax in a month keeps $72 on the first $6,000 and $18 on the remaining $2,000, or $90. The cap bites at roughly $53,600 of monthly tax. File late and you lose the credit and owe interest from the due date, plus any penalty the Comptroller assesses.

Maryland sales tax changes 2025–2027

July 1, 2025

3% tax on data, IT and software services; cannabis to 12%; custom software and vending snack exemptions repealed

May 12, 2026

Cash rounding to the nearest nickel allowed

July 1, 2026

Affiliated-group IT exemption; bullion over $1,000 and school book fairs exempt

January 1, 2027

Authorization needed to issue MPU certificates

Periods after Dec 31, 2026

Electronic filing required

Remote sellers and marketplaces

Out-of-state vendors must register when, in the current or previous calendar year, they make more than $100,000 of gross revenue from sales delivered into Maryland or 200 or more separate transactions into the state. Both tests count all Maryland sales, including exempt sales and sales for resale, and direct and marketplace sales are added together. Maryland is one of the states that kept the transaction test, so a seller of low-priced items can cross the line well before $100,000.

Marketplace facilitators, including online marketplaces, consignment stores and auction houses, collect the tax on sales they facilitate. A seller whose Maryland sales all go through facilitators doesn't need to register, but one that also sells directly must register as an out-of-state vendor once it crosses the threshold. Because there are no local rates, remote compliance is simple: charge 6% on most goods, and the special rates where they apply. Remote IT and software vendors must charge the 3% rate on services used in Maryland. Compare thresholds in our economic nexus guide.

Common mistakes and how to fix them

Assuming services aren't taxable. Since July 1, 2025, IT consulting, programming, hosting and software publishing are taxed at 3%. Check each service against the NAICS lists.

Charging 3% on consumer SaaS. Software sold for individual use is a digital product at 6%. Only enterprise use qualifies for 3%.

Still taxing affiliates. From July 1, 2026, sales of these services between members of the same affiliated group are exempt. Update intercompany billing.

Taxing drinks at 6%. Alcohol is 9%. Set separate tax codes for food and drinks.

Accepting an MPU certificate without checking. Verify the buyer's registration on MDTaxConnect.gov, and expect the stricter rules from January 1, 2027.

Missing the 20th. A late return costs you the vendor credit, worth up to $500 a return, before interest is added.

Official links

What to do next

Register free on Maryland Tax Connect, set tax codes for 6%, 9% and 3% sales, and put the 20th on your calendar. If you sell software or IT services, review your contracts and customers for the affiliated-group exemption and MPU certificates, and get ready for mandatory e-filing in 2027. Use the sales tax calculator to check receipts, and our guide to calculating sales tax for tax-included prices. Selling across the Mid-Atlantic? Compare our Virginia, Pennsylvania and New Jersey guides, and see the Maryland LLC guide if you're still forming the business.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

The general rate is 6%, and Maryland has no county or city sales taxes, so it is the same in Baltimore, Annapolis and Ocean City. Other rates apply to some sales: 9% on alcoholic beverages, 11.5% on short-term car rentals, 8% on short-term truck rentals, 12% on adult-use cannabis and 3% on data, IT and software publishing services.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 12 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1.Tax-General § 11-104, Rates of sales and use tax — Maryland General Assembly · accessed 12 October 2026
2.Tax Alert: Sales and Use Tax Updates 2025–2026 (May 22, 2025) — Comptroller of Maryland · accessed 12 October 2026
3.Tax Alert: Sales and Use Tax Updates 2026–2027 (May 27, 2026) — Comptroller of Maryland · accessed 12 October 2026
4.Technical Bulletin No. 56: Data or IT Services and Software Publishing Services — Comptroller of Maryland · accessed 12 October 2026
5.Tax Alert: Marketplace Facilitators — Comptroller of Maryland · accessed 12 October 2026
6.Tax-General § 11-206, Food — Maryland General Assembly · accessed 12 October 2026
7.Tax-General § 11-105, Vendor credit — Maryland General Assembly · accessed 12 October 2026
8.Tax-General § 11-502, Returns — Maryland General Assembly · accessed 12 October 2026
9.Tax-General §§ 11-702 and 11-703, Licenses — Maryland General Assembly · accessed 12 October 2026
10.Maryland Combined Registration Online Application — Comptroller of Maryland · accessed 12 October 2026
11.Maryland Sales Tax License Registration — Mosey · accessed 12 October 2026

MSMETOOLS is an independent platform and is not affiliated with any government agency, ministry or department.

We provide tools, guides and information for general educational purposes only. Always refer to official government websites for the latest and most accurate information.