COMAR 03.06.01.48 — § 48

.48 Data or Information Technology Services and Software Publishing Services.
A.
Definitions.
(1)
In this regulation, the following terms have the meaning indicated.
(2)
Terms Defined.
(a)
“Buyer” has the meaning stated in
Tax-General Article, §11-101(b), Annotated Code of Maryland
.
(b)
“Cloud computing” means a service that enables on-demand, self-service network access to a shared pool of configurable computer resources, including data storage, analytics, commerce, streaming, e-mail, document sharing, and document editing.
(c)
“Customer tax address” has the meaning stated in
Tax-General Article §11-101(c-1), Annotated Code of Maryland
.
(d)
“Data or information technology service” means services described under NAICS sectors 518, 519, and subsector 5415.
(e)
“Emerging technology development area” means the University of Maryland’s Discovery District located in Prince George’s County.
(f)
“NAICS” means the North American Industrial Classification System, United States Manual, 2022 Edition, published by the United States Office of Management and Budget.
(g)
“Services described under NAICS subsector 5132” means:
(i)
Applications development and publishing (except on a custom basis);
(ii)
Computer software publishing and reproduction;
(iii)
Gaming site publishing;
(iv)
Mobile applications development and publishing (except on a custom basis);
(v)
Packaged computer applications software;
(vi)
Packaged computer operating systems software;
(vii)
Packaged computer software publishing;
(viii)
Packaged computer utility software;
(ix)
Packaged programming language and compiler software publishing;
(x)
Packaged software publishing;
(xi)
Publishing computer software for games; and
(xii)
Software publishing.
(h)
“Services described under NAICS sector 518” means:
(i)
Application hosting (excluding software publishing);
(ii)
Automated data processing;
(iii)
Cloud computing (except software publishing and computer systems design);
(iv)
Cloud storage;
(v)
Co-location in data centers (i.e., rental of server and networking space in data centers);
(vi)
Computer data storage;
(vii)
Computer input preparation;
(viii)
Computer time leasing;
(ix)
Computer time rental;
(x)
Computer time sharing;
(xi)
Computing infrastructure provision;
(xii)
Computing platform infrastructure provision;
(xiii)
Data capture imaging;
(xiv)
Data entry;
(xv)
Data processing computer services;
(xvi)
Data processing (except payroll services, financial transaction processing services);
(xvii)
Disk and diskette conversion;
(xviii)
Disk and diskette recertification;
(xix)
Electronic data processing;
(xx)
Game server hosting;
(xxi)
Infrastructure as a service (IaaS);
(xxii)
Media streaming data storage;
(xxiii)
Media streaming technical support;
(xxiv)
Microfiche recording and imaging;
(xxv)
Microfilm recording and imaging;
(xxvi)
Optical scanning;
(xxvii)
Platform as a service (PaaS);
(xxviii)
Video and audio technical streaming support;
(xxix)
Video tape and film stock technical streaming support;
(xxx)
Virtual currency (cryptocurrency) mining; and
(xxxi)
Web hosting (excluding software publishing).
(i)
“Services described under NAICS sector 519” means:
(i)
Archives;
(ii)
Bookmobiles;
(iii)
Centers for documentation (i.e., archives);
(iv)
Circulating libraries;
(v)
Film archives;
(vi)
Internet search portals;
(vii)
Internet search websites;
(viii)
Lending libraries;
(ix)
Libraries (except motion picture stock footage, motion picture commercial distribution);
(x)
Motion picture film libraries;
(xi)
Music archives;
(xii)
News clipping services;
(xiii)
Press clipping services;
(xiv)
Provision of stock photos;
(xv)
Reference libraries;
(xvi)
Telephone-based recorded information services;
(xvii)
Title search services (except real estate); and
(xviii)
Web search portals.
(j)
“Services described under NAICS subsector 5415” means:
(i)
Audio visual and IT (information technology) systems integration design;
(ii)
CAD (computer-aided design) systems integration design;
(iii)
CAE (computer-aided engineering) systems integration design;
(iv)
CAM (computer-aided manufacturing) systems integration design;
(v)
Computer disaster recovery;
(vi)
Computer hardware consulting;
(vii)
Computer network systems integration design;
(viii)
Computer software consulting;
(ix)
Computer systems integration analysis and design;
(x)
Computer systems integration design consulting;
(xi)
Computer systems integrator;
(xii)
Computer software installation;
(xiii)
Computer systems facilities (i.e., client’s facilities) management and operation;
(xiv)
Custom computer application software programming;
(xv)
Custom computer program or software development;
(xvi)
Custom computer programming services;
(xvii)
Custom computer software analysis and design;
(xviii)
Custom computer software support;
(xix)
Custom search engine optimization (SEO) (except hosting and infrastructure support services);
(xx)
Custom software programming;
(xxi)
Custom webpage design services;
(xxii)
Data processing facilities (i.e., client’s facilities) management and operation;
(xxiii)
Industrial robot automation applications/software design and development;
(xxiv)
Industrial robot programming;
(xxv)
Information management computer systems integration design;
(xxvi)
Local area network (LAN) computer system integration design;
(xxvii)
Machine vision software design and development;
(xxviii)
Material handling robot applications/software design and development;
(xxix)
Office automation computer systems integration design;
(xxx)
Robotics applications/software design and development;
(xxxi)
Robotics process automation software design and development; and
(xxxii)
Welding robot applications/software design and development.
(k)
“Qualified Company” means a company that contracts with the University of Maryland’s Applied Research Laboratory for Intelligence and Security to develop systems and technologies to advance the use of quantum computing.
(l)
“Qualified Cybersecurity Business” means an entity organized for profit that is engaged primarily in the development of innovative proprietary cybersecurity technology or the provision of cybersecurity services.
(m)
“Retail sale” has the meaning stated in
Tax-General Article, §11-101(h), Annotated Code of Maryland
.
(n)
“Software publishing service” means a system software or application software publishing service described under NAICS subsector 5132.
(o)
“Taxable price” has the meaning stated in
Regulation .08 of this chapter
.
(p)
“Vendor” has the meaning stated in
Tax-General Article, §11-101(o), Annotated Code of Maryland
.
(3)
Every classification detail under a NAICS sector's or subsector's industry groups, NAICS industries, and national industries includes all listed services, which can be performed together, separately, or in any combination.
B.
The sale of data or information technology services or software publishing services in the State are subject to sales and use tax in the State as provided in
Tax-General Article, Title 11, Annotated Code of Maryland
.
C.
Except as provided in
Regulation .49 of this chapter
, a retail sale of a data or information technology service or software publishing service is presumed to be made in the state in which the customer tax address is located.
D.
Application of NAICS sector codes.
(1)
Each service the vendor provides must be evaluated individually to determine whether it is a data or information technology service or software publishing service.
(2)
A vendor may not rely on the principal business activity code reported on the vendor’s annual income tax return to determine whether the services the vendor provides are subject to sales and use tax.
E.
A buyer who is registered to remit sales and use tax may present to a vendor a certificate indicating multiple points of use of a data or information technology service or software publishing service as provided in
Regulation .49 of this chapter
.
F.
Exempt Sales.
(1)
The sales and use tax does not apply to:
(a)
A sale of cloud computing to a qualified cybersecurity business;
(b)
A sale of a data or information technology service or software publishing service to a qualified company located in an emerging technology development area made in connection with the work of the company; or
(c)
A sale of a data or information technology service or software publishing service by a qualified company in an emerging technology development area.
(2)
The exemption in
§F(1) of this regulation
does not apply to any tangible personal property, digital product, digital code, or taxable service sold with the exempt service.
(3)
A vendor may accept a signed statement from a buyer certifying the exemption under §F(1)(a) or (b) of this regulation applies unless if, at the time of acceptance, the vendor knows or should have known that the exemption does not apply. The vendor shall retain the statement with the record of sale.
(4)
If sales and use tax is paid on the sale of a service that qualifies for an exemption, the person paying the tax may apply to the Comptroller for a refund pursuant to
COMAR 03.06.03.05
.
Cross References
03.06.01.28A(2)
03.06.01.49A(2)(e)
03.06.01.49A(2)(i)
03.06.01.50A(2)(a)
03.06.01.50A(2)(b)

Cross References
03.06.01.28A(2)

03.06.01.49A(2)(e)

03.06.01.49A(2)(i)

03.06.01.50A(2)(a)

03.06.01.50A(2)(b)

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