Code of Maryland Regulations Title 03 — Comptroller

COMAR 03.06.01.49 — § 49 Multiple Points of Use Certificates.

.49 Multiple Points of Use Certificates.
A.
Definitions.
(1)
In this regulation, the following terms have the meaning indicated.
(2)
Terms Defined.
(a)
“Affiliated Group” has the meaning stated in Internal Revenue Code §1504.
(b)
“Affiliated Group” includes related parties described under Internal Revenue Code §267(b)(10)—(12).
(c)
“Authorized buyer” means a buyer authorized by the Comptroller to issue a multiple points of use certificate in accordance with this regulation.
(d)
“Buyer” has the meaning stated in
Tax-General Article, §11-101(b), Annotated Code of Maryland
.
(e)
“Data or information technology service” has the meaning stated in
Regulation .48 of this chapter
.
(f)
“Multiple points of use certificate” means a certificate presented by an authorized buyer to a vendor that indicates, in accordance with
Tax-General Article, §11-403(e), Annotated Code of Maryland
, that a digital code, digital product, taxable data or information technology service or software publishing service will be concurrently available for use by the buyer or a related entity both in the State and outside of the State.
(g)
“Related entity” means a member of an affiliated group or a related pass-through entity of which the buyer is also a member.
(h)
“Related Pass-Through Entities” means one or more pass-through entities connected through ownership with a common parent pass-through entity but only if the common parent:
(i)
Possesses at least 80 percent of the total voting power of the total value of the pass-through entity; and
(ii)
Has a value equal to at least 80 percent of the total value of the pass-through entity.
(i)
“Software publishing service” has the meaning stated in
Regulation .48 of this chapter
.
(j)
“Vendor” has the meaning stated in
Tax-General Article, §11-101(o), Annotated Code of Maryland
.
B.
Multiple Points of Use Certificate Requirements.
(1)
To issue a multiple points of use certificate, a buyer must:
(a)
Be registered with the Comptroller for a sales and use tax account before requesting authorization to issue a multiple points of use certificate;
(b)
Submit to the Comptroller a separate request for authorization to issue a multiple points of use certificate for each transaction in which the buyer intends to use a multiple points of use certificate.
(c)
Be authorized by the Comptroller to issue a multiple points of use certificate; and
(d)
Deliver a multiple points of use certificate, in the form and manner required by the Comptroller, to the vendor at or before the time of purchase.
(2)
The Comptroller may deny a buyer’s request for authorization to issue a multiple points of use certificate for reasonable cause, including but not limited to the buyer’s fraud, gross negligence, misuse of a multiple points of use certificate, or delinquency in the payment of undisputed sales and use tax.
C.
A buyer who is authorized by the Comptroller may issue a multiple points of use certificate for the purchase of a digital code, digital product, data or information technology service, or software publishing service if, at the time of the purchase, the buyer knows the digital code, digital product, data or information technology service, or software publishing service will be:
(1)
Concurrently available for use by the buyer both in the State and outside of the State; or
(2)
Resold in its original form to at least one related entity for use both inside and outside of the State.
D.
Buyer’s Obligation to Pay or Remit Sales and Use Tax.
(1)
Except as provided in
§D(2) of this regulation
, a buyer who issues a multiple points of use certificate is required to pay or remit the applicable tax to the Comptroller.
(2)
A buyer who issues a multiple points of use certificate with an apportionment determined based on a subsequent resale to a related entity shall:
(a)
Assume or absorb the tax due from the related entity; or
(b)
Remit the tax due from the related entity if the tax is not paid by the related entity.
(3)
A buyer who does not issue a multiple points of use certificate at or before the time of sale, or whose request for authorization to issue a multiple points of use certificate is denied by the Comptroller under
§B(2) of this regulation
may request a refund for sales and use tax paid on the portion of the digital product, digital code, data or information technology service, or software publishing service used outside of Maryland.
E.
Vendor’s Obligation to Collect, Pay, or Remit Sales and Use Tax.
(1)
Except as provided in
§E(3) of this regulation
, a vendor is relieved of the duty to collect, pay, or remit the sales and use tax on the sale of a digital code, digital product, data or information technology service, or software publishing service if the buyer provides the vendor with a completed, authorized multiple points of use certificate.
(2)
A vendor shall obtain a multiple points of use certificate from the buyer before or at the time the sale is consummated to support each transaction for which a multiple points of use certificate applies.
(3)
A vendor may not accept a multiple points of use certificate at any time, including within the period described in §F, or rely on its acceptance of a multiple points of use certificate to relieve the vendor of the obligation to collect and the sales and remit the sales use tax if the vendor:
(a)
Failed to verify at or before the time of the sale, using the methods provided by the Comptroller, that the buyer was authorized by the Comptroller to issue the certificate;
(b)
Knows or should have known that the sale is not for a digital code, digital product, data or information technology service, or software publishing service; or
(c)
Knows or should have known that the sale is not a sale for use in both the State and outside the State.
F.
When the Comptroller notifies a vendor of an intent to assess the tax on a transaction for which the vendor does not possess a multiple points of use certificate, the vendor shall have 60 days from the mailing of the notice to obtain the certificate. If the vendor fails to obtain a proper multiple points of use certificate within the 60-day period, the Comptroller's assessment is final.
G.
Apportionment.
(1)
The apportionment must accurately reflect the primary use location in the State.
(2)
A buyer may use any reasonable method of apportionment that is supported by the buyer’s records as they exist at the time of the sale.
(3)
A buyer’s method of apportionment must be:
(a)
Consistent; and
(b)
Uniform.
H.
The multiple points of use certificate must state:
(1)
The name of the buyer;
(2)
The tax address of the buyer;
(3)
The Maryland combined registration number of the buyer;
(4)
The name of the vendor;
(5)
The address of the vendor;
(6)
The estimated date of the sale or, for a subscription, the renewal term;
(7)
A general description of the purchase including, for each item in the sale:
(a)
Information sufficient to identify the item as a digital product, digital code, data or information technology service, or software publishing service;
(b)
The estimated taxable price; and
(c)
The percentage of the use allocated to Maryland.
(8)
If the digital code, digital product, data or information technology service, or software publishing service is to be resold in its original form to one or more related entities within the State who are expected to remit the use tax to the Comptroller, the certificate must also state for each entity:
(a)
The name of the related entity;
(b)
The tax address of the related entity;
(c)
The Maryland combined registration number of the related entity; and
(d)
The estimated taxable price of the digital code, digital product, data or information technology service, or software publishing service resold in its original form to the related entity.
Cross References
03.06.01.07D
03.06.01.28I
03.06.01.48C
03.06.01.48E

Cross References
03.06.01.07D

03.06.01.28I

03.06.01.48C

03.06.01.48E

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