Sales and Use Tax - Certificates Indicating Multiple Points of Use - Alterations
SB0644 revises Maryland’s sales and use tax rules for “multiple points of use” certificates, which are used when digital codes, digital products, or certain taxable services are purchased for use in more than one taxing jurisdiction or are resold within affiliated business structures. The bill creates a more formal authorization process for buyers: a buyer must register with the Comptroller, obtain authorization to issue these certificates, and remain current on undisputed tax obligations. It also sets minimum authorization terms, renewal procedures, and grounds for denial, suspension, or revocation based on fraud, gross negligence, misuse, or tax delinquency.
The bill also clarifies how certificates are issued, verified, rescinded, and applied to future purchases. A buyer may issue a fully completed certificate without prior Comptroller approval, and vendors are relieved of collection and remittance duties when they receive a valid certificate, subject to later rescission or revocation. The Comptroller must publish the certificate form, and vendors must verify authenticity in the manner prescribed by the Comptroller. The bill applies retroactively to retail sales or use occurring on or after July 1, 2025, and the act takes effect July 1, 2026, later amended to January 1, 2027 in the text provided.
The bill amends § 11-403 of the Tax-General Article to expand and standardize the legal framework for multiple points of use certificates in Maryland’s sales and use tax law. It affects buyers of digital codes, digital products, and certain taxable services, as well as vendors that sell those items, by shifting when tax collection responsibility falls on the vendor versus the buyer and by establishing a formal Comptroller authorization regime. It also requires the Comptroller to provide a certificate form and procedures for authorization, renewal, denial, and revocation, and it applies the changes retroactively to qualifying transactions beginning July 1, 2025.
The bill appears to have had broad support and little visible opposition. It passed the Senate 43-0 and the House 132-0, indicating strong bipartisan agreement. The absence of recorded committee transcript debate suggests the measure was viewed as a technical tax administration update rather than a controversial policy change.
No major contention is evident in the available record. The main policy issues embedded in the bill are administrative: whether buyers should need Comptroller authorization before using multiple points of use certificates, how much discretion the Comptroller should have to deny or revoke authorization, and how vendors should be protected from liability when certificates are later rescinded or invalidated. The bill also imposes verification duties on vendors and requires buyers to maintain tax compliance, but the unanimous votes suggest these provisions were not significantly disputed.