By Saleem A. Shareef, Esq., Checkpoint News
On April 28, 2026, Maryland Governor Wes Moore signed legislation that amends the provisions for multiple points of use (MPU) sales and use tax certificates for digital products or services. (L. 2026, S644 (c. 197), effective 01/01/2027.)
MPU Certificate Authorization
Authorized buyers: Specifically, the amendment requires an authorization by the Maryland Comptroller prior to the issuance of an MPU certificate by a buyer to a vendor. An authorized buyer can present to the vendor a fully completed certificate indicating MPUs of a digital code; digital product; data or information technology service described under NAICS Sector 518, 519, or 5415; or system software or application software publishing service described under NAICS Sector 5132. The amendment also requires an authorized buyer to deliver to the vendor the certificate indicating MPU at or before the time of purchase (i.e., previously, only at the time of purchase).
An authorized buyer can issue an MPU certificate to vendors if: (1) the buyer registers with the Comptroller for a sales and use tax account; (2) following registration, the buyer requests and obtains authorization from the Comptroller to issue a certificate; and (3) the buyer has paid all undisputed taxes payable to the Comptroller or provided for payment in a manner satisfactory to the unit responsible for collection of the tax.
Duration period: An authorization to issue a certificate is valid for a period of not less than two years unless suspended or revoked by the Comptroller.
Renewal: A buyer can apply to the Comptroller for a renewal of the authorization not more than 90 days before the expiration of the current authorization.
Denial: The Comptroller can deny a buyer’s request for authorization or renewal due to the buyer’s fraud, gross negligence, misuse of a certificate, delinquency in the payment of undisputed sales and use tax, or other similar reasonable cause.
Revocation: On written notice to a buyer, the Comptroller can revoke the buyer’s authorization due to the buyer’s fraud, gross negligence, misuse of a certificate, delinquency in the payment of undisputed sales and use tax, or other similar reasonable cause. If the Comptroller revokes a buyer’s authorization, the buyer must provide the Comptroller with a list of all vendors to which the buyer issued certificates. Following revocation of a buyer’s authorization, any certificate issued by the buyer to vendors is void from the date that the Comptroller issues a written notice to each vendor that has received a certificate from the buyer whose authority has been revoked, advising the vendor of the date on which the certificate has been voided. On receipt of the notice from the Comptroller that a certificate is void, the vendor is responsible for collecting or paying and remitting the tax on sales to the buyer whose authorization has been revoked.
MPU Certificates
Duration period: A certificate provided to a vendor remains in effect for all future purchases from the vendor until: (1) the authorized buyer rescinds the certificate; (2) the vendor receives notice from the Comptroller that the buyer’s authorization to issue certificates has been revoked; or (3) the vendor otherwise knows or should know that the buyer’s authorization to issue certificates has been revoked.
Vendor and buyer obligations: On receipt of the properly produced and issued certificate, the vendor is relieved of the obligation to collect, pay, or remit the applicable tax to the Comptroller until the vendor receives notification of rescission by the authorized buyer or revocation by the Comptroller. Further, the buyer is obligated to collect, pay, or remit the applicable tax to the Comptroller.
Apportionment: An authorized buyer can, for each sale subject to the certificate, use any reasonable but consistent and uniform method of apportionment that is supported by the authorized buyer’s records as they exist at the time of the sale and accurately reflects the primary use location in Maryland to determine the applicable tax due. However, when an authorized buyer who has provided a vendor a certificate reasonably anticipates that a purchase from that vendor will be used in Maryland and not outside Maryland, the authorized buyer must: (1) notify the vendor that the sale is not subject to the certificate; and (2) pay the sales tax on that purchase to the vendor at the time of the sale.
Generation of certificates: An authorized buyer must generate a certificate for each vendor from which the buyer intends to make purchases subject to the certificate using the Comptroller’s online application or other mechanism provided by the Comptroller and in the form and manner required by the Comptroller. In order to generate the certificate, the authorized buyer must provide certain required information and any other information required by the Comptroller.
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