Changes to Maryland’s Sales and Use Tax: How to Prepare Your Business

The Maryland Comptroller recently updated its list of Tangible Personal Property and Services Subject to Sales and Use Tax. If you’re a business owner, your goods and services might now be affected by new taxes. You should stay up to date on tax changes so you can ensure you’re still charging, collecting, and filing your state taxes properly.

Let’s look at what’s changed and what you should do as a Maryland business owner to stay on top of tax changes.

Maryland Sales and Use Tax Changes for 2024-2025

Several new laws were passed in Maryland that affect sales and use tax. Some of the changes you should know about are:

• Sales and use tax for electronic smoking devices increased from 12% to 20%.
• Cannabis now includes seeds, seedlings, immature plants, and clones, and all are subject to the 9% sales and use tax.
• Sales and use tax now applies to home amenity rentals (such as swimming pools, saunas, and barbecue areas).
• Materials, parts, or equipment used for certain aircraft no longer have sales and use tax.

Action Steps for Businesses to Stay Compliant

Even if the above changes don’t apply to you or your business, you should still use this checklist to help ensure your business is still tax-ready.

• Identify if your products or services are now taxable
• Pay close attention to items often overlooked, like software subscriptions
• Ensure tax is calculated and collected correctly at your points of sale
• Decide whether to absorb the tax or adjust your pricing
• Educate your sales and finance team on what’s taxable and avoid misclassifying
• Check for exemptions for you and your customers
• Confirm all your documentation is up to date
• Update your tax filing process to reflect the new taxable items
• Ask a professional tax attorney if you have doubts

If you need assistance with your tax situation or you just want a professional evaluation to ensure your business is compliant, the tax attorneys at Gabie & Associates, LLC are ready to step in. We help taxpayers in Baltimore, Columbia, Frederick, Rockville, and throughout Maryland understand and optimize their taxes, and we can help you too. Call (410) 358-1500 or send us a message to discuss your business taxes today.