COMAR 03.06.01.01 — § 1 Personal, Professional, or Insurance Services.

.01 Personal, Professional, or Insurance Services.
A.
Except for taxable services set forth in
Tax-General Article, §11-101(m), Annotated Code of Maryland
, the tax does not apply to a personal, professional, or insurance service that involves a sale as an inconsequential element for which no separate charge is made. Examples of services to which the tax does not apply are services customarily rendered by physicians, dentists, lawyers, accountants, insurance agents, pest exterminators, barbers, beauticians, funeral directors, and storage warehouseperson.
B.
Purchases.
(1)
A person providing nontaxable services shall pay the tax on all purchases of materials, supplies, tools, and equipment used by the person or transferred by the person as part of the nontaxable service unless a specific statutory exemption applies, such as that for medicines and medical supplies. Examples of purchases to which the tax applies are purchases of forms, office supplies, insurance policy blanks and jackets, insecticides, grooming supplies, packing materials, and utilities.
(2)
A person providing taxable services shall pay tax on purchases of materials, supplies, tools, equipment, digital codes, digital products, and taxable services used by the person.
(3)
A person providing taxable services may, however, issue a resale certificate for the purchase of:
(a)
Tangible personal property, digital codes, or digital products transferred as part of a taxable service if the person has not used the tangible personal property, digital codes, or digital products and the tangible personal property, digital codes, or digital products are resold in unchanged form; and
(b)
Taxable services that the person has not used and that are resold in unchanged form.
(4)
Examples.
(a)
A janitorial company may purchase paper towels tax-free by issuing a resale certificate if those towels are used to stock the bathroom of a customer receiving taxable cleaning services. The janitorial company shall pay tax on its purchase of cleaning agents which the janitorial company uses to clean the bathroom of a customer receiving taxable cleaning services.
(b)
A web hosting company may rent server space from a cloud storage company tax-free by issuing a resale certificate if the server space is used to provide cloud storage for a customer purchasing web hosting services and the web hosting company has made or makes no use of the server space being resold.
C.
Sales.
(1)
If a person providing personal, professional, or insurance services also makes independent sales of tangible personal property, digital codes, digital products, or taxable services, that person shall collect and remit the sales and use tax on those sales unless a specific statutory exemption applies.
(2)
Examples of sales subject to tax are sales of:
(a)
Packaged cosmetics, hair tonics, and lotions sold by barbers and beauticians.
(b)
A web design service by a graphic design company that is sold independently from the sale of a nontaxable logo design service.