Maryland's Nieuwe 3% Tech-belasting on IT- and Software-Diensten: Wat elke SaaS-bedrijf and freelance-ontwikkelaar must weten

Als je software verkoopt, websites bouwt, infrastructuur managed, or (if any of your clients have a Maryland address) — you may have become a sales tax collector on July 1, 2025, whether you realized it or not.

Maryland didn't just tweak a rate. It created an entirely new category of taxable services that sits at a different rate than everything else in the state and uses federal industry codes to define what is taxed. For freelance developers, small agencies, SaaS-startups, and IT-consultants who thought "services aren't taxable," the rules changed overnight. Here's what actually changed, who it hits, and how to handle it without scrambling at filing time.

What Changed on July 1, 2025​

On May 20, 2025, Governor Wes Moore signed the Budget Reconciliation and Financing Act of 2025 (BRFA, House Bill 352), closing a $3.3 billion budget gap. Burried inside was a headline provision that had nothing to do with income tax: a brand-new 3% sales and use tax on specific data, IT, and software publishing services.

This is not Maryland's long-running Digital Advertising Gross Revenues Tax (DAGR), which since 2021 has applied a 2.5%–10% gross-receipts tax to very large sellers of digital advertising. The new tax is broader, lower, and applies to many more small businesses. It expanded the definition of "taxable service" under Maryland's sales tax law to include four buckets:

• NAICS 518 — Computing infrastructure providers, data processing, web hosting, and related services
• NAICS 519 — Other information services (web search portals, news syndication, libraries, archives, and other information services)
• NAICS 5132 (often cited as 513210) — Software publishers (system software and application software publishing)
• NAICS 5415 — Computer systems design and related services (custom programming, systems integration, IT consulting, and related design services)

The 2022 edition of the North American Industry Classification System (NAICS) is the reference. That's important because Maryland looks at what you do, not what you call yourself. If you classified your business under a different NAICS code but sell a service described inside one of these four, you are still required to collect.

The rate is 3%, not the state's standard 6% sales tax. But there is a catch: if the same transaction would also be taxable as a sale of tangible personal property, a digital product, or another taxable service at 6%, the 6% rate controls. You don't get to pick the lower rate.

Maryland's Comptroller followed up with emergency regulations and two technical bulletins (including Technical Bulletin No. 56 on June 10, 2025) that fill in sourcing, exemptions, SaaS treatment, multiple points of use (MPU), and contract timing. If you only read the statute, you will miss the operating details.

What Counts as Taxable — And What Doesn't​

The law uses NAICS descriptions, not plain English, so translating them into real invoices is where most businesses get tripped up.

Clearly taxable after July 1, 2025​

• System and application software publishing — selling or licensing access to software you publish, including many SaaS products where you are the publisher. This is the bucket that pulls most SaaS founders into the tax for the first time.
• Computing infrastructure and data processing — cloud hosting, web and application hosting, data processing, and related infrastructure services.
• Web search portals and information services — services described under NAICS 519, such as web search portals and other hosted information services.
• Computer systems design services — custom software development, systems integration, network design, IT consulting, and support services that fall under NAICS 5415. Think: building a custom integration, designing a client's system architecture, ongoing IT help desk and network support that is tied to systems design.

For a freelance developer, that line between "I build websites" and "I design computer systems" is now a tax line. Custom website design, development, and ongoing support tied to systems work can fall inside 5415. Prewritten software that you resell is assessed differently — with customization often pull into the taxable bucket.

Often still exempt​

Maryland carved out several familiar exclusions, and Washington's parallel expansion highlighted similar boundaries:

• Web hosting and domain registration when sold as standalone hosting/domain products (outside the new NAICS buckets) in Washington remain 0% and Maryland's bulletins similarly distinguish hosting described under 518 as taxable while keeping other categories out — read the bulletin for your exact product because labeling matters.
• Traditional print, broadcast, and out-of-home advertising (billboards, naming rights).
• Sales of tangible goods themselves remain under their own tax rules.

The most expensive mistake is assuming "I'm SaaS, so I'm a digital product at 6%" or "I'm a service, so I'm exempt." Under the new guidance, SaaS where you are the software publisher is generally analyzed as a software publishing service at 3%, not a digital product at 6%, unless the transaction qualifies as a taxable digital product. The bulletin says to apply the NAICS-based test first.

The sourcing rule that reaches outside Maryland​

The retail sale of a newly taxable service is presumed to be made in the state where the customer's tax address is located. That's how a freelancer in Austin or a SaaS company in Denver picks up a Maryland obligation: your customer's address is in Maryland, your service is in taxable NAICS, and you have nexus.

For businesses that deliver a single service to other states, Maryland allows a Multiple Points of Use (MPU) certificate. The buyer certifies that the service is used in multiple states, and you source the sale accordingly rather than taxing 100% to Maryland. Without that certificate on file at the time of sale, you must collect as if it is fully Maryland-sourced.

Why This Tax Reaches — Even If You've Never Set Foot in Maryland​

Three features expand the footprint beyond large tech companies:

1. No $100 million threshold. The DAGR had a high global-revenue threshold. The 3% IT/software tax does not. Any vendor with review nexus in Maryland that makes taxable sales to Maryland customers is in scope — including solo consultants and early-stage SaaS organizations.

2. Economic nexus applies. If you exceed Maryland's economic thresholds for sales tax (generally $100,000 in gross revenue from sales into Maryland or 200 transactions), you have nexus without physical presence. Once you have nexus, you must register, collect, and file — even for a handful of Maryland customers.

3. B2B is not exempt. Unlike some states that exempt business-to-business professional services, Maryland's new tax applies to sales to end users in Maryland, including businesses. Your client in Baltimore pays the tax just like a consumer would.

Washington's move makes the pattern even more difficult. Effective October 1, 2025, Washington expanded its Digital Automated Services (DAS) definition to include digital advertising, website development, IT support, software customization, and more — with a broad reading of "digital advertising" that includes layout, graphic design, campaign planning, performance tracking, SEM, and advice. Two states modernizing in the same way, six months apart, is a trend, not a one-off.

How to Price, Invoice, and Collect Without Angering Clients​

The mechanics are simple to describe and easy to get wrong in practice.

1. Map every revenue line to a NAICS bucket​

Don't map at the company level. Map at the product or service level. One company can have four buckets of revenue with different answers:

• Retainer for custom development and systems integration (5415 — likely 3%)
• SaaS subscription where you are the publisher (5132 — likely 3%)
• One-time sale of prewritten, off-the-shelf software delivered digitally (analyze as digital product — likely 6% if taxable)
• Resale of third-party hosting you don't operate (may be 518 depending on how you bundle and describe it)

Use the NAICS manual descriptions, not your marketing copy. "Fractional CTO services" that are actually computer systems design are still 5415.

2. Check the contract date and payment timing​

Starting point: contracts entered into before July 1, 2025, are exempt for the contracted services, but periodic payments due after July 1 for those previously contracted services can become taxable under the bulletin. Retainer agreements that auto-renew, month-to-month retainers, and statements of work with ongoing deliverables are the biggest gray areas. If your agreement says "MRR billed monthly for SaaS access," each post-July 1 billing is a new taxable event unless you have a specific exemption.

Action: pull every Maryland customer's agreement, note the signature date, and flag any that cross July 1. Don't rely on "we signed before July 1, so we're safe."

3. Decide where tax appears on the invoice​

You may separately state the 3% Maryland sales tax, or you may build it into your price and absorb it — but if you absorb it, you still owe it. Many B2B suppliers that add tax at checkout choose to show:

Custom development — July: $5,000.00
Maryland sales tax (3% — IT services, NAICS 5415): $150.00
Total: $5,150.00

If you use Stripe, Paddle, or a similar payment provider, confirm who is the seller of record for sales tax and whether they will collect the new 3% category. Some platforms have not yet added Maryland's 3% IT services as a distinct rate and still default to 6%, which over-collects and creates refund headaches.

4. Handle multi-state use with MPU​

If you sell a single SaaS seat to a company headquartered in Maryland but used by employees in five states, ask the buyer for an MPU certificate before you invoice. With the certificate, you allocate. Without it, Maryland presumes 100% in-state.

Keep MPU certificates with your other exemption documentation. They are auditable.

5. Register before you collect​

You need a Maryland sales and use tax account before you can file. Registration is through the Comptroller's office, and you will file on the assigned frequency (monthly, quarterly, or annual). Even if you have no Maryland sales in a period, you generally still file a zero return while the account is open.

Bookkeeping and Compliance for Clean Filing​

The tax is only 3%, but the bookkeeping cost of getting it wrong is much higher — e.g., penalties, interest, and crediting customers after the fact.

Separate the 3% stream from the 6% stream​

In your chart of accounts, create distinct liability accounts:

• Sales Tax Payable — MD 3% IT/Software Services
• Sales Tax Payable — MD 6% (or other rates)

When you use plain-text accounting, that separation is explicit. A Beancount entry for a Maryland invoice might look like:

2025-07-15 * "Acme Co — Baltimore" "Custom integration — July retainer"
  Assets:AccountsReceivable:AcmeCo        5150.00 USD
  Income:Services:CustomDevelopment      -5000.00 USD
  Liabilities:SalesTaxPayable:MD-3Pct     -450.00 USD

At month-end, the balance in Liabilities:SalesTaxPayable:MD-3Pct is exactly what you owe for the new category. Mixing it into a single sales-tax payable account forces you to reconstruct every invoice at filing time and invites errors.

Reconcile three totals, each period​

• Gross taxable sales by rate — 3% bucket and 6% bucket, separately.
• Exempt/MPU sales — supported by certificates on file, not by memory.
• Tax collected vs. tax remitted — they must tie to the Comptroller's return.

If you use a payment platform that reports only net deposits (common with Stripe), you need a separate settlement reconciliation that rebuilds gross sales before filing. Booking net deposits as revenue understates both revenue and liability.

Keep the documents an auditor will ask for​

Maryland auditors start with invoices, not returns. Keep:

• Signed contracts and SOWs with dates
• Invoices showing separately stated taxes (or evidence you absorbed it)
• MPU and exemption certificates valid at the time of sale
• Nexus workpapers showing how you decided where to register
• Platform reports that prove gross vs. net for SaaS

A tax-compliance calendar that tracks registration dates, filing frequencies, and certificate expirations prevents the most common failure: collecting at the wrong time because a certificate lapsed.

Common gifters of notices​

• Charging 6% on everything. If you default your tax engine to 6%, you over-collect on 3% transactions and create refund obligations to customers, not just to the state.
• Sourcing to the billing contact's address instead of the tax address. For multi-location buyers, the tax address in your system may not be the procurement headquarters.
• Assumer services are always exempt. "It's a service" is not a valid reason.
• Forgetting use tax on your own purchases. If a Maryland vendor doesn't collect the 3% tax on a purchase, you may owe use tax.

What to Do This Quarter​

If you have any Maryland customers — or are not sure — work through this short checklist before your next filing:

1. Inventory. List every product and service you sell and tag each line as 5, 4, 5, 4, 1, 5, 2, or out-of-scope.
2. Nexus review. Add up Maryland-sourced sales for the current and prior year. If you exceed the threshold, register.
3. Contract review. Identify pre-July 1 contracts and determine whether upcoming billings are exempt or taxable.
4. System update. Add a 3% Maryland-IT-services rate to your billing system, separate from the 6% rate, and add an MPU workflow.
5. Invoice fix. Separately state the new tax on the next invoice to every Maryland customer in a taxable bucket.
6. Account mapping. Split your sales-tax payable account so that the 3% revenue is audited.

For Washington sellers, do the same exercise with an October 1, 2025 effective date and Washington's broader DAS list — especially if you sell professional development, IT support, or live online training.

The Bigger Picture​

Maryland deliberately chose a narrow, NAICS-based expansion rather than the broader B2B services tax that was floated to expand. That matters: states that need new revenue now have a form of patent. Georgia, Virginia, and other Atlantic states are already being watched, and Washington's adoption six months after Maryland makes multi-state changes more likely, not less.

The practical takeaway for a small agency or SaaS business is not to panic, but to be precise. A 3% line on a $5,000 retainer is$150 — small enough that many are tempted to absorb it. But absorbing it without booking the liability is where the trouble starts. Pricing clarity, invoice clarity, and ledger clarity turn a new tax into a routine. Pricing vagueness turns it into a financial finding.

Simplify Your Financial Management​

As you update your pricing and invoices for new sales tax obligations like Maryland's 3% tech tax, maintaining clear financial records is what keeps a rate change from becoming a reporting mess. Beancount.io provides plain-text accounting that gives you complete control over your financial accounting — no black boxes, no vendor lock-in. Get started for free and see why developers and finance professionals are switching to plain-text accounting.