Hey friends. Welcome back to Baltimore County Unfiltered. I'm your host and favorite marketing project manager, girly Zuryna. And you guys know on Baltimore County, unfiltered, we keep it real about what's happening in our very own backyard and how it affects our money, our business, and our everyday life.
Today's episode is important if you run a service-based business here in Maryland, especially if that business is in the digital marketing, tech or creative services space, you're gonna wanna hear this information. So get your notebooks out, get your phone ready. Here's the headline. As of July 1st, 2025, Maryland has started taxing certain digital and tech-based services at 3%. Yes, the law changed quietly, but the impact could be major. So let's talk about what's happening.
Who this law impact who's getting taxed? I did my due diligence, you guys, and that means I went to the WBAL website, Baltimore Banner, Fox 45, Google. I went to the comptroller website and I wanted to know the who, what, when, where, and why. And then I wanted to break it down to what this means for you and what we should be doing next. So first things first. Who's getting taxed?
If your business offers things like web hosting, cloud storage, SEO, and webpage designs, or software as service subscriptions, or anything that looks like data processing or software publishing, then you're now legally required to collect and remit 3% sales tax on those services. The state of Maryland is using N-A-I-C-S codes, 5 18 5 19 5 4 1 5 and 5 1 3 2 to define what's taxable.
I know you don't need to memorize those codes, but what you do need to do is look into whether or not your services fall under things like application hosting, cloud computing, computer system design, or information services like search engines, digital archives, or even subscription based tools. I know your head spinning. Take a deep breath with me. No, for realte. Okay, so what if your business isn't tech focused? What does this mean for you? Here's the tricky part.
This new tax code is not about what your business is classified as, it's more about the actual services you're selling. So even if you're a marketing agency, freelancer or virtual assistant, but you offer something like webpage design, cloud-based campaign tools or performance-based services. You still might be on the hook for this sales tax. Now, you might be asking, are there any exemptions for this? And there are a few.
One being if you're a nonprofit with a Maryland issue exemption card, or if you're certain tech companies in special innovation zones like the University of Maryland Discovery District, also resellers who can prove that they're not using the services themselves, but most of us regular service providers, yep, we gotta pay that 3%. Now I'm all about action items. I never wanna give you problems, but not give you a solution so what should you do now? First things first.
Review your offerings, your services, and check to see if they fall under these new taxable services. Number two, update your client invoices. I love making a templated style, change. So if you already have invoices that are ready to go, make sure you just add that 3% sales tax if it applies to the services you offer. Next. You wanna make sure you keep good records, especially for those tax exempt clients, because, I'd rather have the information and not need it than to need it and not have it.
So that's always my rule of thumb. The last thing, probably the most important thing, because you guys know, I love making sure you have the right people, processes, and tools. This is a human tool. But talk to your accountant or your bookkeeper as soon as possible so you can make sure that you're compliant and that you set yourself up for success in the future. So, moral of the story. What does this mean? What is my take? What is my forrest through the tree view of this?
I personally think this is Maryland's way of catching up with the digital economy. And if you're not collecting the tax, then you might be eating it out of your own profits and let's not do that. Honestly, I'll be keeping an eye on how all of this pans out, and if you want a cheat sheet of what services are taxable or you need help breaking it down for your business, I'll be sure to include all of the resources that I found in the episode. Show notes, and I'll include them on my Instagram.
So be sure to follow me at Operations Unfiltered or at Lady Z says, for all the details. Thank you so much for tuning into this quick episode of Baltimore County Unfiltered. As a reminder, I do have full length episodes of Operations Unfiltered, the podcast that takes you behind the scenes of influencer and talent management. That is also available on Apple, Spotify, YouTube, wherever you get your podcast. I'd love to have you join my crew.
With that said, have a great rest of your week and I'll see you for next Baltimore County Unfiltered.