Sales and Use Tax - Elementary or Secondary School Book Fairs - Exemption

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb0358*

HOUSE BILL 358
Q4 6lr1166
CF SB 403
By: Delegate Palakovich Carr
Introduced and read first time: January 19, 2026
Assigned to: Ways and Means
Committee Report: Favorable
House action: Adopted
Read second time: March 7, 2026

CHAPTER ______

AN ACT concerning 1

Sales and Use Tax – Elementary or Secondary School Book Fairs – Exemption 2

FOR the purpose of providing that the sales and use tax does not apply to a sale made at a 3
book fair by an elementary or secondary school in the State or a nonprofit 4
parent–teacher organization or other nonprofit organization within an elementary 5
or secondary school at an elementary or secondary school in the State, subject to 6
certain limitations ; and generally relating to a sales and use tax exemption for 7
elementary or secondary school book fairs. 8

BY repealing and reenacting, without amendments, 9
Article – Tax – General 10
Section 11–204(b)(5) and (6) 11
Annotated Code of Maryland 12
(2022 Replacement Volume and 2025 Supplement) 13

BY repealing and reenacting, with amendments, 14
Article – Tax – General 15
Section 11–204(b)(7) and (8) 16
Annotated Code of Maryland 17
(2022 Replacement Volume and 2025 Supplement) 18

BY adding to 19
Article – Tax – General 20
Section 11–204(b)(9) 21
Annotated Code of Maryland 22
2 HOUSE BILL 358

(2022 Replacement Volume and 2025 Supplement) 1

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 2
That the Laws of Maryland read as follows: 3

Article – Tax – General 4

11–204. 5

(b) The sales and use tax does not apply to a sale by: 6

(5) an elementary or secondary school in the State or a nonprofit 7
parent–teacher organization or other nonprofit organization within an elementary or 8
secondary school in the State for the sale of magazine subscriptions in a fund –raising 9
campaign, if the net proceeds are used solely for the educational benefit of the school or its 10
students, including a sale resulting from an agreement or contract with an organization to 11
participate in a fund–raising campaign for a percentage of the gross receipts under which 12
students act as agents or salespersons for the organization by selling or taking orders for 13
the sale; 14

(6) a parent –teacher organization or other organization within an 15
elementary or secondary school in the State or within a school system in the State; 16

(7) subject to subsection (e) of this section, a bona fide church, religious 17
organization, or other nonprofit organization exempt from taxation under § 501(c)(3) of the 18
Internal Revenue Code if: 19

(i) the sale is made at an auction sale; and 20

(ii) the proceeds of the sale are used to carry on the exempt purposes 21
of the church or organization; [or] 22

(8) a nonprofit organization exempt from tax ation under § 501(c)(3) of the 23
Internal Revenue Code that maintains a memorial on property that is owned by the State 24
if the proceeds of the sale are used to maintain a memorial on property that is owned by 25
the State; OR 26

(9) AN ELEMENTARY OR SEC ONDARY SCHOOL IN THE STATE OR A 27
NONPROFIT PARENT –TEACHER ORGANIZATION OR OTHER NONPROFIT 28
ORGANIZATION WITHIN AN ELEMENTARY OR SECONDARY SCHOOL IN THE STATE IF 29
THE SALE IS MADE AT A BOOK FAIR HELD IN–PERSON ON THE PREMISES OF T HE 30
SCHOOL AND THE NET PROCEEDS ARE USED SOLELY FOR THE EDUCATIONAL 31
BENEFIT OF THE SCHOO L OR ITS STUDENTS , INCLUDING A SALE RES ULTING FROM 32
AN AGREEMENT OR A CONTRACT WITH AN ORG ANIZATION TO PARTICI PATE IN A 33
BOOK FAIR FOR A PERCENTAGE OF THE GROSS RECEIPTS UNDER WHICH STUDENTS, 34
TEACHERS, SCHOOL STAFF , OR MEMBERS OF THE 35
HOUSE BILL 358 3

PARENT–TEACHER ORGANIZATION OR OTHER NONPROFIT O RGANIZATION WITHIN 1
AN ELEMENTARY OR SEC ONDARY SCHOOL ACT AS AGENTS OR SALESPERSONS FOR 2
THE THIRD–PARTY VENDOR BY MANAGING THE BOOK FAIR. 3

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 4
1, 2026. 5

Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.