Key figures
Maryland receivables
2026, with sources
The 2025 tech tax
Maryland changed the answer for software companies on July 1, 2025. Chapter 604 of the Acts of 2025 extended the sales tax to data services, information technology services and software publishing services, defined by NAICS sectors 518 and 519 and subsectors 5132 and 5415, at 3%. The Comptroller’s Technical Bulletin 56 says each service is evaluated on what it is, not on the seller’s own NAICS code.
SaaS is both a digital product and a software publishing service. Sold for commercial use in a business’s enterprise computer system, it is taxed at 3%. Sold for an individual’s use, it is a digital product taxed at the higher 6% rate. The old exemption for customized software and SaaS was repealed. Subscriptions billed after July 1, 2025 are taxable even if the contract predates the change.
Registering and collecting
A remote seller registers once its sales into Maryland exceed $100,000 or reach 200 transactions in the current or prior calendar year. Nontaxable sales count toward both tests. Registration is due by the first day of the month after the threshold is crossed, and collection starts on the next sale.
An example: a B2B SaaS company with 150 Maryland customers paying $1,000 a month has $1.8 million of Maryland sales a year, well over the threshold. It registers, charges 3% on each invoice ($30 a month per customer), and files Maryland returns on the frequency the Comptroller assigns. A consumer app selling the same software to individuals would charge 6%.
On the books
Because the rate depends on how the customer uses the software, the billing system needs to know whether each Maryland customer is a business buying for its systems or an individual. Tax collected is a liability, separate from revenue and from deferred revenue on annual prepaid plans.
The federal baseline
This page covers what Maryland adds. The federal rules underneath it apply here too.
Common questions
Is SaaS taxable in Maryland?
Yes, since July 1, 2025. The Comptroller says SaaS is both a digital product and a software publishing service. Sold for use in a business’s enterprise computer system, it is taxed at 3%; sold for an individual’s use, it is a digital product taxed at 6%. The exemption for customized software was repealed at the same time.
When does a remote seller have to register in Maryland?
When its sales into Maryland exceed $100,000 or reach 200 separate transactions in the current or prior calendar year, counting exempt sales. It registers by the first day of the following month and starts collecting on later sales.
Receivables next door
- DCDistrict of Columbia receivablesDC charges 6% sales tax on digital goods and data processing services, which reaches most SaaS, and remote sellers register at $100,000 or 200 sales. A rise to 7% has been postponed.
- DEDelaware receivablesDelaware has no sales tax, so there is nothing to collect from Delaware customers. A company operating in Delaware instead pays a gross receipts tax on its own receipts, 0.3983% for services after a $100,000 monthly exclusion.
- PAPennsylvania receivablesPennsylvania taxes SaaS at 6%, with 7% in Allegheny County and 8% in Philadelphia, and requires remote sellers to register once sales pass $100,000.
- VAVirginia receivablesVirginia doesn’t tax SaaS or other software delivered over the Internet. Sales tax runs 5.3% to 7% by locality, and remote sellers register at $100,000 or 200 transactions.
- WVWest Virginia receivablesWest Virginia’s 6% sales tax reaches many services and prewritten software, while electronic data processing is exempt, so SaaS depends on what it does. Remote sellers register at $100,000 or 200 transactions.
Founder guides on this
- Sales taxSales tax nexus for startups: when you owe tax in a stateSince Wayfair, selling into a state can create a sales tax obligation. How economic nexus works, why SaaS is taxable in some states and when to register.
- StripeHow to reconcile Stripe payouts to your booksA Stripe payout is charges less fees, refunds and disputes, batched across days. How to book it gross, tie it to the bank, and keep revenue right.
- RevenueDeferred revenue for SaaS startups, explainedAn annual prepayment is cash today and revenue over a year. How deferred revenue works under ASC 606, why it’s a liability, and the schedule behind it.
More of the Maryland guide
- AccountingAccounting and state tax in MarylandCorporate tax, conformity to federal rules, apportionment and what it does to your books
- PayablesPayables and contractors in MarylandPaying vendors and contractors: 1099 filing, use tax, contractor tests and withholding
- PayrollPayroll taxes and employer rules in MarylandWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in MarylandRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in MarylandCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.