Md. Code Regs. 03.06.01.31

Current through Register Vol. 51, No. 25, December 13, 2024

Section 03.06.01.31 - Direct Payment Permits

A. General Provisions.

(1) Authority to Issue a Direct Payment Permit.

(a) Except as provided in §A(1)(c) of this regulation, the Comptroller may not grant the authority to make direct payment, to the Comptroller, of sales and use tax due on purchases by a vendor or issue permits evidencing this authority.

(b) Notwithstanding the provisions of §A(1)(a) of this regulation, the Comptroller may continue to administer direct payment permits issued to vendors before July 1, 1993.

(c) On or after July 1, 2002, the Comptroller may issue a direct payment permit to a licensed vendor with which the Comptroller has entered into an effective rate agreement.

(2) A person to whom a Direct Payment Permit has been issued by the Comptroller may not be required to pay vendors the sales and use tax, as long as the permit remains valid, but instead shall make direct payments to the Comptroller of any sales and use tax due. Holders of Direct Payment Permits shall be required to file tax reports and make payments of all taxes due on or before the twentieth day of the month succeeding that month in which the obligation for the tax was incurred. Sales and use tax shall become due when the property or service bought is actually placed in service, or when the utilization becomes known, whichever occurs first. If determination of taxability is not made within 1 year from the receipt of goods or services by the permit holder, then those goods and services shall be deemed taxable. The permit holder shall be required to make proper determination of the tax due and keep appropriate records of that determination.

(3) Holders of Direct Payment Permits shall notify their vendors that they hold this permit and may furnish to each vendor a photocopy or electronic copy of that permit. In making purchases the permit holder shall furnish to vendors a certificate of exemption bearing the holder's Direct Payment Permit number.

(4) Vendors who make sales to holders of Direct Payment Permits shall maintain records of the amount and description of each sale and the identity of the permit holder. A vendor, upon notice of revocation or discontinuance of the holder's Direct Payment Permit, shall collect sales and use tax on all purchases from the date of notice.

B. Repealed.

C. Revocations of Direct Payment Permit.

(1) The Comptroller may revoke a Direct Payment Permit at any time for failure of the holder to comply with the conditions under which the permit was granted, or for any other reasons constituting misuse of the permit, or for any other good cause.

(2) A direct payment permit issued in conjunction with an effective rate agreement shall be revoked when an effective rate agreement is no longer in effect.

(3) Within 30 days after receipt by the permit holder of notice of revocation by the Comptroller or at least 30 days before unilateral discontinuance of direct payment authority, the holder shall give notice to each supplier of the termination of the Direct Payment authority and return the Direct Payment Permit Certificate to the Comptroller.

D. Exemption Certificate for Use in Connection with Direct Payment Permits. The certificate of exemption to be furnished by the holder to vendors in making purchases shall bear the Direct Payment Permit number.

Date ___________________________

This is to certify that the property and/or services purchased from (vendor) is purchased free of Maryland sales and use tax as provided under conditions and authorization granted the buyer as holder of a Direct Payment Permit issued by the Comptroller of the State of Maryland.

______________________________________

BUYER

By ___________________________________

TITLE

______________________________________

BUYER'S DIRECT PAYMENT PERMIT NO.

Md. Code Regs. 03.06.01.31

Regulations .31 effective August 1, 1947; repealed effective July 28, 1978 (5:15 Md. R. 1185)
Regulation .31A amended effective May 22, 2006 (33:10 Md. R. 881)
Regulations .31 and B repealed effective December 19, 1994 (21:25 Md. R. 2104)
Regulation .31A, C amended effective June 26, 2003 (30:12 Md. R. 787); amended effective 49:14 Md. R.704, eff. 7/11/2022