Maryland’s New 3% Sales and Use Tax on Digital and IT Services

For creative agencies, freelancers, and marketing pros alike, the big question isn’t just what’s being taxed—it’s what do I need to do now?

In response to questions from AAFB members and across the state’s creative community, AAF Baltimore reached out to state leadership in advance of the rollout. We’re now sharing the latest updates and official guidance from Delegate Vanessa Atterbeary’s office and the Maryland Comptroller.

Here’s What’s Available

The Maryland Comptroller’s Office has launched a dedicated Digital & IT Services Tax resource site with tools to help businesses prepare and comply:

• Business checklist to walk through key action items

• Direct contact: Matt Dudzic, Director of State Affairs, MDudzic@marylandtaxes.gov

• Abbreviated flyer with QR code:

2025-tax-changes-for-businesses.pdf

Download PDF • 2.30MB

From the Comptroller’s Guidance — Steps to Take Now

1. Determine applicability

   • Review your NAICS code and service descriptions against the list of taxable digital products and services.

   • If unclear, request a written determination from the Comptroller’s office.

2. Register to collect sales & use tax

   • If the tax applies, you must have a Maryland sales and use tax license before collecting.

   • Apply via the Maryland Tax Connect portal.

3. Update contracts and proposals

   • Add language stating that sales tax will be charged where applicable.

   • Adjust estimates and scopes to reflect the additional 3% where required.

4. Adjust invoicing and accounting systems

   • Ensure your invoicing software can add and report the tax correctly.

   • Track taxable vs. non-taxable services for reporting.

5. File and remit the tax

   • File returns and remit collected tax according to your assigned filing frequency (monthly, quarterly, or annually).

6. Review vendor relationships

   • If you purchase taxable digital services, expect vendors to begin charging the tax; factor this into budgets.

Why This Still Matters

Whether you’re running a multi-person agency or operating solo, the new tax may affect your:

• Contracts

• Invoicing

• Vendor relationships

• Internal workflows

• Tax registration status

Even if you don’t fall under the affected NAICS codes directly, some of your partners or platforms might—so you could see the impact passed through in invoices or service fees.

What AAFB Is Doing

We’re continuing to track developments as businesses and the state itself work through this transition. Expect evolving guidance over the coming months as interpretation and enforcement details take shape.

In the meantime, we’re pulling together a downloadable resource sheet with links to official state guidance and expert commentary so you can make informed decisions without spending hours digging.

Got Insight to Share?

If your team has already made changes to contracts, tax processes, or software vendor agreements, we’d love to hear from you. Real-world insights help us all get smarter, faster.

This article is for informational purposes only and does not constitute legal or financial advice. Please consult a qualified professional for guidance on your specific situation.