ANNAPOLIS, Md. — The Maryland Office of the Comptroller announced that a new 3% sales and use tax on certain data and information technology services takes effect July 1, 2025, as part of budget legislation passed in the recent session. Additionally, the sales and use tax on adult-use cannabis increases from 9% to 12%, with the additional revenue directed to the state’s general fund. The agency has released guidance and resources to help businesses comply with these changes.
The new IT services tax applies to specific data and technology services, including system software and application software publishing. To assist businesses, the Comptroller’s Office published two technical bulletins on its website. Revised Technical Bulletin 56 addresses frequently asked questions about the tax’s application to IT services, while Technical Bulletin 54 clarifies multiple points of use certificates. Businesses can file the new tax through the Maryland Tax Connect platform.
The agency has conducted extensive outreach to prepare businesses for the changes. Efforts include hosting webinars, creating a dedicated webpage, distributing flyers statewide, and launching a paid social media campaign. These initiatives aim to ensure businesses understand their obligations under the new tax structure. The Comptroller’s Office encourages businesses with questions to email CompMDLegal@marylandtaxes.gov or consult a tax professional for specific circumstances.
Emergency regulations, submitted last month to meet the July 1 deadline, will remain in effect for up to 180 days. The Comptroller’s Office plans to finalize regulations in November 2025, following a 30-day public notice and comment period. Final regulations will be submitted to the Joint Committee on Administrative, Executive and Legislative Review and published in the Maryland Register. Businesses will have an opportunity to provide feedback during this process.
The cannabis tax increase, also effective July 1, raises the rate to 12%. The additional 3% revenue will support the state’s general fund, as outlined in the 2025 budget legislation. Recent cannabis sales and use tax revenue reports are available online. The Comptroller’s Office emphasized the importance of businesses reviewing these changes to ensure compliance.
The agency’s outreach efforts reflect a proactive approach to implementing the new taxes. Webinars have provided detailed explanations of the IT services tax, covering topics such as taxable services and exemptions. The dedicated webpage consolidates all relevant resources, including bulletins, filing instructions, and contact information. Flyers have been distributed to businesses across Maryland, particularly those in technology and cannabis sectors, to raise awareness.
The Maryland Tax Connect platform, designed to streamline tax filing, will facilitate compliance with the new IT services tax. Businesses can access the platform to submit returns and manage their tax obligations. The Comptroller’s Office has prioritized user-friendly tools to reduce the administrative burden on businesses adapting to the changes.
The emergency regulations address immediate compliance needs while allowing time for refinement. The 180-day period enables the agency to gather input from businesses and stakeholders before finalizing rules. The formal regulatory process, including review by the Joint Committee and publication in the Maryland Register, ensures transparency and accountability.
The cannabis tax increase aligns with Maryland’s ongoing efforts to regulate and tax the adult-use cannabis market, which was legalized in 2023. The additional revenue will bolster the general fund, supporting state programs and services. The Comptroller’s Office regularly updates its revenue reports to provide transparency on cannabis tax collections.
Businesses navigating these changes can access a comprehensive library of resources on the Comptroller’s website. The agency stressed the importance of reviewing these materials to understand the scope of the new taxes and ensure accurate filing. For complex tax situations, professional consultation is recommended.
The Comptroller’s Office has a history of engaging with businesses during tax policy changes. Previous efforts, such as the 2023 digital advertising tax implementation, involved similar outreach strategies, including webinars and technical guidance. The current approach builds on those experiences to support compliance with the 2025 tax changes.
These tax measures reflect Maryland’s efforts to diversify revenue sources amid evolving economic sectors. The IT services tax targets a growing industry, while the cannabis tax increase capitalizes on the expanding legal cannabis market. The Comptroller’s Office remains committed to providing clear guidance as businesses adapt to the new requirements.
