Under Section 11-217(a) of the Tax-General Article, "research and development" means basic and applied research in the sciences and engineering and the design, development, and governmentally mandated pre-market testing of prototypes, products, and processes. Market research, research in the social sciences or psychology, and other non-technical activities, routine product testing, sales services, or technical and non-technical services are not included.
Purchases of tangible personal property for use or consumption in research and development are exempt. No special forms are required to claim the research and development exemption. If entitlement to exemption is not evident from the documents of sale, a vendor should obtain a certificate from the purchaser stating that the property will qualify.