Maryland is rolling out several important legal changes that will affect how small businesses price services, draft contracts, manage subscriptions, and advertise digital products. While some updates take effect in 2025 and others in 2026, preparing early will help you stay compliant and avoid costly missteps.
Below is a practical breakdown of what’s changing — and what your business should be doing now.
1. Maryland Expands Sales Tax to IT & Digital Services (Effective July 1, 2025)
Maryland has introduced a 3% Sales & Use Tax on a broad range of digital and IT services. This includes:
- Cloud storage and hosting
- SaaS platforms
- Web and server hosting
- IT consulting
- Custom software development
- Data processing services
If your offering is classified as a digital product, such as a NFT, rather than a service, the standard 6% tax applies instead.
What This Means for Your Business
- Vendors: Expect higher costs for software and IT subscriptions.
- Service providers: If you offer any of the services above, you must begin collecting and remitting the new tax.
- Everyone: Review your contracts and pricing to ensure they reflect the new tax obligations.
2. New Advertising Rules for Digital Goods (Effective October 1, 2025)
If your business sells digital products under a license, you can no longer imply that customers are purchasing ownership.
You must provide either:
- A clear statement explaining that the customer is receiving a license, or
- An explicit acknowledgement from the customer
This rule aims to prevent confusion about what rights consumers actually receive when buying digital content.
What This Means for Your Business. Review your marketing materials, product pages, and checkout language to ensure they accurately describe the nature of the license and comply with the new law.
3. Consumer Contracts Can No Longer Shorten Limitation Periods (Effective June 1, 2026)
Maryland now prohibits businesses from shortening the time consumers have to bring legal claims. Any clause that attempts to reduce the statute of limitations is automatically void.
This applies to contracts involving:
- Consumer goods
- Consumer services
- Any personal, household, or family‑use agreement
What This Means for Your Business.
- Review your consumer‑facing contracts;
- Remove any language that limits how long a customer has to sue; and
- Begin using updated templates before June 1, 2026.
4. New Rules for Automatic Renewal of Subscriptions (Effective June 1, 2026)
If your business offers auto‑renewing subscriptions or memberships, Maryland now requires clearer, more consumer‑friendly practices.
Cancellation must be:
- Easy
- Cost‑effective
- Timely
Renewal terms must be:
- Clear and conspicuous
- Displayed near the point of purchase
- Transparent about pricing changes
- Clear about how to cancel
Cancellation must be at least as easy as the sign‑up process.
What This Means for Your Business. Audit your sign‑up flows, renewal notices, and cancellation processes to ensure they meet the new standards.
If any of these apply to you, we’re here to help. Give us a call.
