Maryland’s Sales Tech Tax: What It Means for Your Business

Posted on May 15, 2025 5 minutes to read

We’re Here to Help You Navigate Maryland’s New Tech Tax

If you run a business in Maryland—or work with companies that do—you’ve likely heard the news: starting July 1, 2025, a new 3% sales tax on data and IT services will take effect across the state. At CSU, we want to make sure you’re fully prepared and confident about what’s coming.

We know tax updates like this can be confusing or feel like just another expense. That’s why we’re breaking it down simply, sharing what this means for your business, and offering ways we can help you stay compliant—without the stress.

What’s Being Taxed?

This new tax applies to many of the digital and IT services you use every day. Here are just a few examples:

Cloud storage and hosting (like AWS or Google Drive)
Data backup and recovery (we offer this—learn more here)
IT consulting and support services (that’s us!)
Custom software development
Application hosting and server management
Video streaming infrastructure and online directories

Services that support cybersecurity or quantum computing are currently exempt—but most IT and data services fall under the new law.

Why Is Maryland Doing This?

The state is working to modernize its tax system and fill a multi-billion-dollar budget gap. Lawmakers estimate this new tax will generate more than $1.4 billion by 2030.

While we understand the state’s goals, we also know this impacts your bottom line—especially if you’re already balancing IT budgets tightly. That’s why it’s important to prepare ahead of time, so this tax doesn’t take you by surprise.

What This Means for Your Business

If you provide or use IT services in Maryland, here’s what you’ll need to do:

Review your vendor contracts to see where the tax might apply
Update your invoicing and accounting systems to reflect the 3% tax
Keep records of taxable and non-taxable services
Talk to a tax advisor—or ask us, and we’ll help connect you

At CSU, we’re updating our own systems to support these changes—and we’ll make sure your IT infrastructure and service billing stay aligned, too.

Our Promise to You

This kind of legislation can feel frustrating—we get it. That’s why our job isn’t just to provide IT support. It’s to guide you through everything that comes with it, including policies like this.

We’re already helping clients prepare by:

Ensuring their IT service usage is clearly tracked
Making cloud services as tax-efficient as possible
Providing guidance on how to structure future contracts and vendor relationships

We’ll continue to monitor this law as it rolls out and keep you updated with clear, actionable information.

Questions? Let’s Talk.

If you’re unsure whether this tax will apply to your services—or how to make sense of it—reach out to us anytime. We’re here to help you avoid unnecessary surprises and keep your tech environment strong, stable, and compliant.