Md. Code Regs. 03.06.01.25

Current through Register Vol. 51, No. 22, November 1, 2024

Section 03.06.01.25 - Transactions in Interstate Commerce

A. General. The tax does not apply to a transaction which is not within the taxing power of this State under the Constitution of the United States, as interpreted from time to time by applicable court decisions.

B. Tangible Personal Property Shipped From this State.

(1) If tangible personal property is sold within this State, and possession is taken by the buyer within this State, the tax applies even if the tangible personal property is to be transported out of this State immediately upon delivery.

(2) If tangible personal property is sold within this State and possession is taken by the buyer outside this State, the tax does not apply, if the property is not to be used in Maryland. Possession is taken by the buyer outside this State only if either of the following tests are met:

(a) The seller is obligated to personally deliver the tangible personal property outside this State; or

(b) The seller is, by terms of the sales contract, obligated to deliver the tangible personal property to a common carrier or to the mails for transportation outside this State.

(3) If tangible personal property is sold within this State and possession is taken by the buyer outside this State, the tax applies if the property is to be brought into this State for use in this State. The duty of the vendor to collect the sales and use tax on a sale for use in the State is not affected by delivery of the property to the buyer at a point outside Maryland. If the vendor, exercising reasonable judgment, knows or should know that the buyer intends to bring the property into this State for use here, the vendor is obligated to collect the tax.

C. Tangible Personal Property Shipped into this State. In those cases in which tangible personal property is shipped into this State pursuant to a contract of sale, the sale will be considered to be made in this State if both of the following tests are met:

(1) The contract of sale is entered into either conditionally or unconditionally in this State by or on account of a nonresident seller who has in this State a place of business from which sales are made or a sales office.

(2) The delivery of the tangible personal property is made by the seller to the buyer in this State. Delivery of tangible personal property will be considered as made in this State if either:

(a) Physical possession of the tangible personal property is transferred by the seller to the buyer in this State; or

(b) The tangible personal property is shipped by the seller from a point outside this State to a buyer in this State either by common carrier or mail, whether the shipment is F.O.B. the seller's place of business or otherwise.

D. The tax applies to sales for use in this State regardless of whether the sale takes place in this State or outside this State.

Md. Code Regs. 03.06.01.25

Regulation .25 repealed effective July 21, 1976 (3:15 Md. R. 785)
Regulation .25B amended effective October 11, 1993 (20:20 Md. R. 1567)