(a) (1) In this section, 'research and development' means: (i) basic and applied research in the sciences and engineering; and (ii) the design, development, and governmentally required pre-market testing of prototypes, products, and processes. (2) 'Research and development' does not include: (i) market research; (ii) research in the social sciences or psychology and other nontechnical activities; (iii) routine product testing; (iv) sales services; or (v) technical and nontechnical services. (b) The sales and use tax does not apply to a sale of tangible personal property, a digital code, or a digital product for use or consumption in research and development.
Maryland Legal Code