Maryland sales tax on invoices (2026 guide)

Maryland's sales and use tax rate is 6%, and it's the same everywhere in the state — Maryland's counties and cities don't add their own sales tax. Most services aren't taxed, but Maryland taxes a short list of them, plus digital products.

The change that matters most for freelancers is recent: since July 1, 2025, Maryland charges a 3% sales tax on many data, IT and software services — including custom programming and custom webpage design. If you're a developer, IT consultant or SaaS business with Maryland customers, read this guide carefully.

Maryland sales tax rates

The 3% tax on IT, data and software services

Chapter 604 of the Acts of 2025 added services described in four NAICS codes to Maryland's taxable services, at a 3% rate:

• 518 — computing infrastructure, data processing, web hosting and related services (for example cloud computing, cloud storage, IaaS and PaaS, data entry, application and web hosting);
• 519 — web search portals, libraries, archives and other information services;
• 5415 — computer systems design and related services (for example custom software programming, custom webpage design, computer software consulting, software installation, systems integration, CAD systems design and custom SEO); and
• 5132 — software publishing (packaged software, apps published other than on a custom basis).

A few rules from the Comptroller's Technical Bulletin 56:

• What counts is the service, not your NAICS code. Each service you provide must be evaluated individually against the NAICS descriptions.
• SaaS is both a digital product and a software publishing service. It's taxed at 3% when bought for use in an enterprise computer system, but at 6% when bought for other uses, such as by an individual.
• Contracts signed before July 1, 2025 generally aren't taxed, even if you deliver or get paid later. But subscriptions, auto-renewals and change orders that add new services are treated as new sales.
• Resale: a buyer can buy a taxable service tax-free for resale only if it resells the service in the same form, without using it. A contractor that uses a subcontractor's service to deliver its own project is the end user and pays the tax.
• Multiple points of use: if a buyer will use the service both inside and outside Maryland, it can give you a multiple points of use (MPU) certificate; you then don't collect the tax and the buyer pays use tax on the Maryland share.

New in 2026: from July 1, 2026, sales of these services, digital products and digital codes between members of the same affiliated group are exempt.

Other taxable services in Maryland

Charges for services are generally exempt unless Maryland law lists them. The Comptroller's list includes:

• fabrication, printing or production of goods by special order,
• cleaning of a commercial or industrial building,
• commercial cleaning or laundering of textiles for businesses that need it regularly,
• security services, including detective, guard, armored car and security systems services,
• credit reporting,
• telephone answering service, mobile telecommunications and pay-per-view TV.

Labor to repair or alter someone else's property to restore it to its original condition isn't taxable, and neither is labor for application or installation.

Registering to collect Maryland sales tax

You need a Maryland sales and use tax license before you make taxable sales; you register and file through MD Tax Connect. Your registration number is eight digits. Returns are due on the 20th of the month after the period ends, and for periods beginning after December 31, 2026, sales and use tax returns must be filed electronically.

Remote sellers. An out-of-state business must register if, in the previous or current calendar year, its gross revenue from sales delivered into Maryland is more than $100,000, or it makes 200 or more separate transactions into Maryland.

What a Maryland sales tax invoice should show

• your business name and address,
• the customer's name and address,
• a unique invoice number and the invoice date,
• a description and price for each item or service,
• sales tax as a separate line, with the rate applied (6% or 3%), and
• the total due.

If one invoice mixes 3% services, 6% items and non-taxable work, put each on its own line so the client can see which rate applies to what.

Resale and exemption certificates

Maryland has no required resale certificate form. A valid certificate must include the buyer's name, address and Maryland sales and use tax registration number, plus a signed statement that the purchase is for resale. The Comptroller publishes a suggested blanket resale certificate that a regular customer can give you once.

Watch two limits from the Comptroller's guidance:

• You can't accept a resale certificate for a cash, check or credit card sale under $200 unless you deliver the goods to the buyer's retail place of business (with some exceptions).
• Except for antiques and used collectibles, you can't accept a resale certificate from an out-of-state buyer without a Maryland license.

Nonprofits and government agencies use a Comptroller-issued exemption certificate, a wallet-sized card with an eight-digit number. Record the number and keep the record for at least four years. See how to invoice a tax-exempt customer.

A worked example

Suppose you're a web developer and you invoice a Baltimore business for:

• $4,000 for custom webpage design (a NAICS 5415 service, taxed at 3%), and
• $1,000 for copywriting (not a taxable service).

The tax is $4,000 × 3% = $120.00. The invoice total is $4,000 + $1,000 + $120 = $5,120.00. Before July 1, 2025, the same design work wouldn't have been taxed at all.

Selling to customers in other states

If you ship goods or deliver taxable services to customers in another state, that state's rules may apply instead of Maryland's. Since the Supreme Court's 2018 decision in South Dakota v. Wayfair, states can require out-of-state sellers to register and collect their sales tax once sales into the state pass a threshold the state sets. If you sell across state lines regularly, check the thresholds and registration rules of each state you sell into — and use that state's rate on those invoices.

Common mistakes on Maryland invoices

• Not charging the 3% tax on development, hosting or IT services sold after June 30, 2025.
• Relying on your NAICS code instead of looking at each service you sell.
• Charging 6% on enterprise SaaS that should be taxed at 3% — or 3% on SaaS for individual use.
• Accepting a resale certificate from a buyer that will use the service itself.
• Adding a county sales tax. Maryland doesn't have one.

Quick checklist for Maryland invoices

• ✅ Sales and use tax license through MD Tax Connect
• ✅ Each service checked against the 3% NAICS list
• ✅ 6%, 3% and non-taxable items on separate lines
• ✅ Resale certificates with the buyer's Maryland registration number
• ✅ Exemption numbers recorded and kept for four years