Martin O'Malley, Governor

Ch. 3

[(b) The sales and use tax does not apply to a sale of COMPUTER SERVICES
FOR USE BY AN INDIVIDUAL PARTICIPATING IN A HOME SCHOOL PROGRAM AS
AN ALTERNATIVE TO ATTENDANCE AT PUBLIC OR PRIVATE SCHOOL FOR
ELEMENTARY OR SECONDARY EDUCATION, [custom computer software services
relating to procedures and programs that:

(1)       otherwise are taxable under this title:

(2)       are to be used by a specific person:

(3)       (i) are created for that person: or

(ii) contain standard or proprietary routines that incorporate
significant creative input to customize the procedures and programs for that person:
and

(4)       do not constitute a program, procedure, or documentation that is
mass produced and sold to:

(i) the general public: or

(ii) persons associated in a trade, profession, or industry.

(c) The sales and use tax does not apply to the sale of an optional computer
software maintenance contract if the buyer does not have a right, as part of the
contract, to receive at no additional cost software products that are separately priced
and marketed by the vendor.1

[(d)] (B) (C) The sales and use tax does not apply to the use of a taxable
service obtained by using a prepaid telephone calling arrangement.

(a) In this section, "computer program" means a set of statements or
instructions to be used directly or indirectly in a computer in order to bring about a

certain result.

(b) The sales and use tax does not apply to a sale of a computer program that
is legally permitted to be and is intended to be:

(1) reproduced for sale; or

(2) incorporated in whole or in part into another computer program
intended for sale.]

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[11-225.