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Maryland Technology Services Tax –
Effective July 1, 2025 

Maryland is introducing a new 3% sales and use tax on technology services used in the state. This law affects all service providers, including eTrepid. Here’s what you need to know. ​

​Beginning July 1, 2025, Maryland will impose a 3% sales and use tax on many technology services. This applies to clients based in Maryland or using services within the state (e.g., remote employees). All providers—including eTrepid—are required to collect and remit this tax, which will appear as a line item on your invoice. 

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What's Being Taxed

Taxable services fall under the following NAICS categories: 

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  • NAICS 518: Data processing, hosting, and related services 

  • NAICS 519: Information services 

  • NAICS 5415: Computer systems design and related services 

  • NAICS 5132: Software publishing services 

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These include services such as:

  • Managed IT and cybersecurity 

  • Cloud storage, hosting, and backup 

  • Software licensing and subscriptions 

  • Web design and data analytics 

  • Custom software development (previously exempt)

Exemptions

You may be exempt if you:

  • Resell the services 

  • Use services across multiple jurisdictions (MPU) 

  • Are a nonprofit or government entity 

 
To claim exemption, submit: 

  • Maryland Resale Certificate 

  • Tax Exemption Certificate 

  • Multiple Points of Use (MPU) Certificate

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  • What is the Maryland Technology Services Tax under HB 352?
    A 3% tax on specified digital and tech services used in Maryland, effective July 1, 2025.
  • Why is this tax being implemented?
    To expand Maryland's tax base and support state-funded education initiatives.
  • When does the tax take effect?
    It applies to services provided, billed, or used on or after July 1, 2025.
  • Who has to pay this tax?
    Anyone using taxable services within Maryland, regardless of provider location.
  • My company is out-of-state but has remote MD employees. Are we affected
    Yes. Use in Maryland is taxable, and an MPU certificate may be needed.
  • Do out-of-state providers need to charge this tax?
    Yes, if their services are used in Maryland.
  • What services are affected?
    Services under NAICS 518, 519, 5415, and 5132—including IT, cloud, cyber, software.
  • Are cybersecurity and managed IT services included?
    Yes, if they fall under these categories.
  • Does this apply to custom software?
    Yes. HB 352 repeals the custom software exemption.
  • What if services are bundled?
    If not itemized, the entire bundle may be taxed.
  • Who can claim exemption?
    Resellers, tax-exempt entities, and multi-state users with documentation.
  • What is an MPU Certificate?
    It allows tax apportionment based on in-state vs. out-of-state use.
  • What happens if I submit documents late?
    Tax cannot be refunded retroactively. Documentation must be timely.
  • How do I submit documents?
    Upload via our form or email ap@etrepid.com.
  • Will the tax be itemized?
    Yes, as 'Maryland Technology Services Tax – 3%'.
  • How does it impact my recurring invoice?
    It increases by 3% for taxable services starting in July 2025.
  • I prepaid for services—what happens?
    Services crossing into July may be prorated.
  • What if I was taxed incorrectly?
    Contact billing; we’ll review your status.
  • Where can I read the law?
    You can read about this law here: https://mgaleg.maryland.gov/2025RS/bills/hb/hb0352E.pdf
  • Need Further Information?
    Email ap@etrepid.com or call (301) 259-3414.
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Submit Exemption Certficate

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