Maryland Sales Tax Exemption For Software

The Maryland sales tax exemption for software provides a sales & use tax exemption for Maryland-based businesses that purchase and use certain types of software during the course of their operations. The knowledgeable and detail-oriented sales tax consultants at the Agile Consulting Group can provide your organization with the resources and tools to take advantage of this exemption and improve your business’s cash flow.

In general, per MD Code Ann. Tax-Gen. 11-102(a), tangible personal property that is sold at retail is subject to sales and use tax on the gross sales price. Tangible personal property is defined in MD Code Ann. Tax-Gen 11-101(k)(1)(i) as meaning, “corporeal personal property of any nature.” By using the term “corporeal”, Maryland institutes a very literal definition of tangible personal property because corporeal means that the property in question must be a physical object and exist as a physical form. This definition is relevant to any discussion about software purchases because this definition makes an important distinction between the type of software that should be considered as tangible personal property versus intangible personal property.

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Practice Ignition

You see them all the time from software companies, heck you’ve received two from us in the past month. Why do we do them? Very simply product updates make us money and they do this in three primary ways.

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