Maryland 2025 Regular Session

Maryland Senate Bill SB1045 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	sb1045
6	6
7	7	SENATE BILL 1045
8	8	Q4 5lr3654
9	9	CF HB 1554
10	10	By: Senator Hettleman
11	11	Introduced and read first time: February 15, 2025
12	12	Assigned to: Rules
13	13
14	14	A BILL ENTITLED
15	15
16	16	AN ACT concerning 1
17	17
18	18	Sales and Use Tax – Taxable Business Services – Alterations 2
19	19
20	20	FOR the purpose of altering the definitions of “taxable price” and “taxable service” for the 3
21	21	purposes of certain provisions of law governing the sales and use tax to impose the 4
22	22	tax on certain labor and services; specifying the rate of the sales and use tax for 5
23	23	certain labor and services; and generally relating to the sales and use tax. 6
24	24
25	25	BY repealing and reenacting, without amendments, 7
26	26	Article – Tax – General 8
27	27	Section 11–101(a) and (l)(1) 9
28	28	Annotated Code of Maryland 10
29	29	(2022 Replacement Volume and 2024 Supplement) 11
30	30
31	31	BY adding to 12
32	32	Article – Tax – General 13
33	33	Section 11–101(c–12) and 11–104(l) 14
34	34	Annotated Code of Maryland 15
35	35	(2022 Replacement Volume and 2024 Supplement) 16
36	36
37	37	BY repealing and reenacting, with amendments, 17
38	38	Article – Tax – General 18
39	39	Section 11–101(c–12), (l)(3), and (m) 19
40	40	Annotated Code of Maryland 20
41	41	(2022 Replacement Volume and 2024 Supplement) 21
42	42
43	43	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 22
44	44	That the Laws of Maryland read as follows: 23
45	45
46	46	Article – Tax – General 24
47	47
48	48	11–101. 25 2 SENATE BILL 1045
49	49
50	50
51	51
52	52	(a) In this title the following words have the meanings indicated. 1
53	53
54	54	(C–12) “NAICS” MEANS THE NORTH AMERICAN INDUSTRIAL 2
55	55	CLASSIFICATION SYSTEM, UNITED STATES MANUAL, 2022 EDITION, PUBLISHED BY 3
56	56	THE UNITED STATES OFFICE OF MANAGEMENT AND BUDGET. 4
57	57
58	58	[(c–12)] (C–13) “Permanent” means perpetual or for an indefinite or unspecified 5
59	59	length of time. 6
60	60
61	61	(l) (1) “Taxable price” means the value, in money, of the consideration of any 7
62	62	kind that is paid, delivered, payable, or deliverable by a buyer to a vendor in the 8
63	63	consummation and complete performance of a sale without deduction for any expense or 9
64	64	cost, including the cost of: 10
65	65
66	66	(i) any labor or service rendered; 11
67	67
68	68	(ii) any material used; or 12
69	69
70	70	(iii) any property, digital code, or digital product sold. 13
71	71
72	72	(3) “Taxable price” does not include: 14
73	73
74	74	(i) a charge that is made in connection with a sale and is stated as 15
75	75	a separate item of the consideration for: 16
76	76
77	77	1. a delivery, freight, or other transportation service for 17
78	78	delivery directly to the buyer by the vendor or by another person acting for the vendor, 18
79	79	unless the transportation service is a taxable service; 19
80	80
81	81	2. a finance charge, interest, or similar charge for credit 20
82	82	extended to the buyer; 21
83	83
84	84	3. a labor or service for application or installation UNLESS 22
85	85	THE LABOR OR SERVICE IS A TAXABLE SERVICE ; 23
86	86
87	87	4. a mandatory gratuity or service charge in the nature of a 24
88	88	tip for serving food or beverage to a group of 10 or fewer individuals for consumption on the 25
89	89	premises of the vendor; 26
90	90
91	91	5. a professional service UNLESS THE SERVICE I S A 27
92	92	TAXABLE SERVICE ; 28
93	93
94	94	6. a tax: 29
95	95	SENATE BILL 1045 3
96	96
97	97
98	98	A. imposed by a county on the sale of coal, electricity, oil, 1
99	99	nuclear fuel assemblies, steam, or artificial or natural gas; 2
100	100
101	101	B. imposed under § 3–302(a) of the Natural Resources 3
102	102	Article, as a surcharge on electricity, and added to an electric bill; 4
103	103
104	104	C. imposed under §§ 6–201 through 6–203 of the Tax – 5
105	105	Property Article, on tangible personal property subject to a lease that is for an initial period 6
106	106	that exceeds 1 year and is noncancellable except for cause; or 7
107	107
108	108	D. imposed under § 4–102 of this article on the gross receipts 8
109	109	derived from an admissions and amusement charge; 9
110	110
111	111	7. any service for the operation of equipment used for the 10
112	112	production of audio, video, or film recordings UNLESS THE SERVICE I S A TAXABLE 11
113	113	SERVICE; or 12
114	114
115	115	8. reimbursement of incidental expenses paid to a third party 13
116	116	and incurred in connection with providing a taxable detective service; 14
117	117
118	118	(ii) the value of a used component or part (core value) received from 15
119	119	a purchaser of the following remanufactured truck parts: 16
120	120
121	121	1. an air brake system; 17
122	122
123	123	2. an engine; 18
124	124
125	125	3. a rear axle carrier; or 19
126	126
127	127	4. a transmission; 20
128	128
129	129	(iii) a charge for a nontaxable service that is made in connection with 21
130	130	a sale of a taxable communication service, even if the nontaxable charges are aggregated 22
131	131	with and not separately stated from the taxable charges for communications services, if the 23
132	132	vendor can reasonably identify charges not subject to tax from its books and records that 24
133	133	are kept in the regular course of business; or 25
134	134
135	135	(iv) a transportation network company impact fee imposed under § 26
136	136	10–408 of the Public Utilities Article. 27
137	137
138	138	(m) “Taxable service” means: 28
139	139
140	140	(1) fabrication, printing, or production of tangible personal property or a 29
141	141	digital product by special order; 30
142	142	4 SENATE BILL 1045
143	143
144	144
145	145	(2) commercial cleaning or laundering of textiles for a buyer who is engaged 1
146	146	in a business that requires the recurring service of commercial cleaning or laundering of 2
147	147	the textiles; 3
148	148
149	149	(3) cleaning of a commercial or industrial building; 4
150	150
151	151	(4) cellular telephone or other mobile telecommunications service; 5
152	152
153	153	(5) “900”, “976”, “915”, and other “900”–type telecommunications service; 6
154	154
155	155	(6) custom calling service provided in connection with basic telephone 7
156	156	service; 8
157	157
158	158	(7) a telephone answering service; 9
159	159
160	160	(8) pay per view television service; 10
161	161
162	162	(9) credit reporting; 11
163	163
164	164	(10) a security service, including: 12
165	165
166	166	(i) a detective, guard, or armored car service; and 13
167	167
168	168	(ii) a security systems service; 14
169	169
170	170	(11) a transportation service for transmission, distribution, or delivery of 15
171	171	electricity or natural gas, if the sale or use of the electricity or natural gas is subject to the 16
172	172	sales and use tax; 17
173	173
174	174	(12) a prepaid telephone calling arrangement; [or] 18
175	175
176	176	(13) the privilege given to an individual under § 4–1102 of the Alcoholic 19
177	177	Beverages and Cannabis Article to consume wine that is not purchased from or provided 20
178	178	by a restaurant, club, or hotel; OR 21
179	179
180	180	(14) THE FOLLOWING SERVICES I F BOTH THE PROVIDER OF THE 22
181	181	SERVICE AND THE BUYE R ARE BUSINESS ENTIT IES: 23
182	182
183	183	(I) AN ACCOUNTING , BOOKKEEPING , BILLING, OR PAYROLL 24
184	184	SERVICE DESCRIBED UN DER NAICS SECTOR 5412; 25
185	185
186	186	(II) AN OFFICE SUPPORT SE RVICE, INCLUDING A SERVICE 26
187	187	DESCRIBED UNDER NAICS SECTOR 561110, 5614, OR 561910, OTHER THAN A 27
188	188	SERVICE DESCRIBED UN DER ITEM (6), (7), OR (9) OF THIS SUBSECTION ; 28
189	189	SENATE BILL 1045 5
190	190
191	191
192	192	(III) A PERMANENT OR TEMPO RARY EMPLOYEE OR CON TRACTOR 1
193	193	PLACEMENT , INCLUDING A SERVICE DESCRIBED UNDER NAICS SECTOR 5613; 2
194	194
195	195	(IV) A DATA OR INFORMATIO N TECHNOLOGY SERVICE 3
196	196	DESCRIBED UNDER NAICS SECTOR 518, 519, OR 5415; 4
197	197
198	198	(V) A SYSTEM SOFTWARE OR APPLICATION SOFTWARE 5
199	199	PUBLISHING SERVICE D ESCRIBED UNDER NAICS SECTOR 5415; 6
200	200
201	201	(VI) A CONSULTING SERVICE DESCRIBED UNDER NAICS 7
202	202	SECTOR 5416; 8
203	203
204	204	(VII) AN EXPERIMENTAL DEVE LOPMENT SERVICE DESC RIBED 9
205	205	UNDER NAICS SECTOR 5417; 10
206	206
207	207	(VIII) A PHOTOGRAPHY , DESIGN, OR PRINTING SERVICE , 11
208	208	INCLUDING A SERVICE DESCRIBED UNDER NAICS SECTOR 541420, 541430, OR 12
209	209	541490; 13
210	210
211	211	(IX) A LOBBYING, PUBLIC RELATIONS , OR MARKETING SERVICE 14
212	212	DESCRIBED UNDER NAICS SECTOR 5418; 15
213	213
214	214	(X) A LANDSCAPING AND NO NRESIDENTIAL BUILDIN G OR 16
215	215	PROPERTY MAINTENANCE SERVICE, INCLUDING A SERVICE DESCRIBED UNDER 17
216	216	NAICS SECTOR 561210, 5616, OR 5617, OTHER THAN A SERVICE DESCRIBED 18
217	217	UNDER ITEM (3) OR (10) OF THIS SUBSECTION ; 19
218	218
219	219	(XI) A HEAVY TRUCK OR BUS REPAIR SERVICE DESCR IBED 20
220	220	UNDER NAICS SECTOR 8111; 21
221	221
222	222	(XII) A REPAIR SERVICE DES CRIBED UNDER NAICS SECTOR 22
223	223	8112 OR 8113; 23
224	224
225	225	(XIII) A FINANCIAL PLANNING OR TAX PREPARATION S ERVICE 24
226	226	DESCRIBED UNDER NAICS SECTOR 5239 OR 5412; 25
227	227
228	228	(XIV) AN APPRAISAL SERVICE DESCRIBED UNDER NAICS 26
229	229	SECTOR 541990; 27
230	230
231	231	(XV) A SPORTS OR PERFORMI NG ARTS ADVERTISING SERVICE; 28
232	232	OR 29
233	233	6 SENATE BILL 1045
234	234
235	235
236	236	(XVI) A VALET OR PARK ING SERVICE DESCRIBE D UNDER NAICS 1
237	237	SECTOR 812930, OTHER THAN A PUBLIC PARKING GARAGE . 2
238	238
239	239	11–104. 3
240	240
241	241	(L) (1) THE SALES AND USE TAX FOR A SALE OF A TAXA BLE SERVICE 4
242	242	DESCRIBED UNDER § 11–101(M)(14) OF THIS SUBTITLE IS 2.5% OF THE TAXABLE 5
243	243	PRICE. 6
244	244
245	245	(2) IF A DIFFERE NT RATE FROM THE RAT E SPECIFIED UNDER 7
246	246	PARAGRAPH (1) OF THIS SUBSECTION C OULD BE APPLIED TO A SALE OR USE OF 8
247	247	TANGIBLE PERSONAL PR OPERTY, A DIGITAL CODE , A DIGITAL PRODUCT , OR A 9
248	248	TAXABLE SERVICE , THE HIGHER RATE SHAL L APPLY TO THE SALE . 10
249	249
250	250	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 11
251	251	1, 2025. 12
252	252