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.
*sb0403*

SENATE BILL 403
Q4 6lr1167
CF HB 358
By: Senator McCray Senators McCray, Augustine, Bailey, Guzzone, Hettleman,
King, Lewis Young, Rosapepe, Salling, and Zucker
Introduced and read first time: January 28, 2026
Assigned to: Budget and Taxation
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: February 15, 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 o ther 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
2 SENATE BILL 403

Annotated Code of Maryland 1
(2022 Replacement Volume and 2025 Supplement) 2

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 3
That the Laws of Maryland read as follows: 4

Article – Tax – General 5

11–204. 6

(b) The sales and use tax does not apply to a sale by: 7

(5) an elementary or secondary school in the State or a nonprofit 8
parent–teacher organization or other nonprofit organization within an elementary or 9
secondary school in the State for the sale of magazine subscriptions in a fund –raising 10
campaign, if the net proceeds are used solely for the educational benefit of the school or its 11
students, including a sale resulting from an agreement or contract with an organization to 12
participate in a fund–raising campaign for a percentage of the gross receipts under which 13
students act as agents or salespersons for the organization by sellin g or taking orders for 14
the sale; 15

(6) a parent –teacher organization or other organization within an 16
elementary or secondary school in the State or within a school system in the State; 17

(7) subject to subsection (e) of this section, a bona fide church, religious 18
organization, or other nonprofit organization exempt from taxation under § 501(c)(3) of the 19
Internal Revenue Code if: 20

(i) the sale is made at an auction sale; and 21

(ii) the proceeds of the sale are used to carry on the exempt purposes 22
of the church or organization; [or] 23

(8) a nonprofit organization exempt from taxation under § 501(c)(3) of the 24
Internal Revenue Code that maintains a memorial on property that is owned by the State 25
if the proceeds of the sale are used to maintain a memorial on property that is owned by 26
the State; OR 27

(9) AN ELEMENTARY OR SEC ONDARY SCHOOL IN THE STATE OR A 28
NONPROFIT PARENT –TEACHER ORGANIZATION OR OTHER NONPROFIT 29
ORGANIZATION WITHIN AN ELEMENTARY OR SECONDARY SCHOOL IN THE STATE IF 30
THE SALE IS MADE AT A BOOK FAIR HELD IN –PERSON ON THE PREMIS ES OF THE 31
SCHOOL AND THE NET P ROCEEDS ARE USED SOL ELY FOR THE EDUCATIO NAL 32
BENEFIT OF THE SCHOO L OR ITS STUDENTS , INCLUDING A SALE RES ULTING FROM 33
AN AGRE EMENT OR A CONTRACT WITH AN ORGANIZATION TO PARTICIPATE IN A 34
BOOK FAIR FOR A PERCENTAGE OF THE GROSS RECEIPTS UNDER WHICH STUDENTS, 35
SENATE BILL 403 3

TEACHERS, SCHOOL STAFF , OR MEMBERS OF THE 1
PARENT–TEACHER ORGANIZATION OR OTHER NONPROFIT O RGANIZATION WITHIN 2
AN ELEMENTARY OR SECONDARY SCHOOL ACT AS AGENTS OR SAL ESPERSONS FOR 3
THE THIRD–PARTY VENDOR BY MANAGING THE BOOK FAIR. 4

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 5
1, 2026. 6

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