Sales and Use Tax - Elementary or Secondary School Book Fairs - Exemption
Summary
HB358 creates a new sales and use tax exemption for sales made at in-person book fairs held on the premises of an elementary or secondary school in Maryland. The exemption applies when the school, a nonprofit parent-teacher organization, or another nonprofit organization within the school conducts the sale, and when the net proceeds are used solely for the educational benefit of the school or its students. The bill also covers arrangements where a third-party vendor runs the book fair and students, teachers, school staff, or parent-teacher organization members act as agents or salespersons managing the event.
The measure amends Maryland’s Tax-General Article, Section 11-204(b), by adding book fairs to the list of sales exempt from the sales and use tax. It takes effect July 1, 2026. In practical terms, schools and qualifying nonprofit groups will no longer need to collect sales tax on eligible book fair purchases, which may slightly reduce tax revenue while supporting school fundraising and literacy-related events.
Impact
HB358 expands Maryland’s existing sales and use tax exemptions by adding a new category for qualifying elementary and secondary school book fairs. It modifies Section 11-204(b) of the Tax-General Article to exempt eligible in-person book fair sales at schools, including sales conducted through third-party fundraising arrangements, so long as proceeds are used for the educational benefit of the school or its students. The bill affects schools, PTAs/PTOs, nonprofit organizations operating within schools, and vendors participating in book fair fundraising programs, and it may modestly reduce state and local sales tax collections on those transactions.
Sentiment
The bill appears to have broad bipartisan support and little visible opposition. It passed the House 120-0 and the Senate 46-0, indicating unanimous approval in both chambers. The lack of committee transcript discussion in the provided materials suggests the measure was not especially controversial and was generally viewed as a straightforward tax exemption tied to school fundraising and educational support.
Contention
No major points of contention are reflected in the provided record. The only potentially sensitive issue is the creation of another sales tax exemption, which can raise concerns about narrowing the tax base and reducing revenue. However, the unanimous votes suggest lawmakers largely agreed that the educational and fundraising benefits for schools outweighed any fiscal downside. The bill’s limitation to in-person book fairs on school premises and to proceeds used for educational purposes likely helped address concerns about scope and abuse.