Maryland had previously enacted two important – and troubling – sets of tax changes: a new tax on digital advertising and a substantial expansion of its sales tax to digital products and services.  As a result of several significant problems with both tax changes, the Maryland legislature just passed Senate Bill 787.

  • S.B. 787 amends Maryland’s Digital Advertising Gross Revenues Tax by: (1) delaying the start date to January 1, 2022; (2) exempting broadcast and news media entities’ digital advertisement services, and (3) prohibiting the pass-through of the tax via a separate charge.
  • S.B. 787 also amends Maryland’s sales and use tax expansion on digital products by: (1) exempting a limited number of digital services, including live-streamed school instruction; (2) expanding the custom computer software exemption; and (3) making various technical corrections.

Maryland Governor Larry Hogan is expected to neither sign nor veto the bill, which would allow S.B. 787 to become law in 30 days.

Read the full Legal Alert here.