diff --git a/templates/terraform/constants/backend_service.go.erb b/templates/terraform/constants/backend_service.go.erb
index bc3c5b2a1792..848291ad31b1 100644
--- a/templates/terraform/constants/backend_service.go.erb
+++ b/templates/terraform/constants/backend_service.go.erb
@@ -12,6 +12,21 @@
 	# See the License for the specific language governing permissions and
 	# limitations under the License.
 -%>
+// Whether the backend is a global or regional NEG
+func isNegBackend(backend map[string]interface{}) bool {
+	backendGroup, ok := backend["group"]
+	if !ok {
+		return false
+	}
+
+	match, err := regexp.MatchString("(?:global|regions/[^/]+)/networkEndpointGroups", backendGroup.(string))
+	if err != nil {
+		// should not happen as long as the regexp pattern compiled correctly
+		return false
+	}
+	return match
+}
+
 func resourceGoogleComputeBackendServiceBackendHash(v interface{}) int {
 	if v == nil {
 		return 0
@@ -111,6 +126,16 @@ func resourceGoogleComputeBackendServiceBackendHash(v interface{}) int {
 		// the hash function doesn't return something else.
 		buf.WriteString(fmt.Sprintf("%f-", v.(float64)))
 	}
+	if v, ok := m["max_utilization"]; ok && !isNegBackend(m) {
+		if v == nil {
+			v = 0.0
+		}
+
+		// floats can't be added to the hash with %v as the other values are because
+		// %v and %f are not equivalent strings so this must remain as a float so that
+		// the hash function doesn't return something else.
+		buf.WriteString(fmt.Sprintf("%f-", v.(float64)))
+	}
 
     // This is in region backend service, but not in backend service.  Should be a no-op
     // if it's not present.
diff --git a/templates/terraform/encoders/backend_service.go.erb b/templates/terraform/encoders/backend_service.go.erb
index a9e3ec9f2181..68f383c27f95 100644
--- a/templates/terraform/encoders/backend_service.go.erb
+++ b/templates/terraform/encoders/backend_service.go.erb
@@ -39,17 +39,9 @@ if !ok {
 backends := backendsRaw.([]interface{})
 for _, backendRaw := range backends {
 	backend := backendRaw.(map[string]interface{})
-	backendGroup, ok := backend["group"]
-	if !ok {
-		continue
-	}
 
-	match, err := regexp.MatchString("(?:global|regions/[^/]+)/networkEndpointGroups", backendGroup.(string))
-	if err != nil {
-		return nil, err
-	}
-	if match {
-		// Remove `max_utilization` from any backend that belongs to a serverless NEG. This field
+	if isNegBackend(backend) {
+		// Remove `max_utilization` from any backend that belongs to an NEG. This field
 		// has a default value and causes API validation errors
 		backend["maxUtilization"] = nil
 	}
diff --git a/third_party/terraform/tests/resource_compute_backend_service_test.go.erb b/third_party/terraform/tests/resource_compute_backend_service_test.go.erb
index 0873439b77e4..572f0af5ad14 100644
--- a/third_party/terraform/tests/resource_compute_backend_service_test.go.erb
+++ b/third_party/terraform/tests/resource_compute_backend_service_test.go.erb
@@ -78,6 +78,44 @@ func TestAccComputeBackendService_withBackend(t *testing.T) {
 	})
 }
 
+func TestAccComputeBackendService_withBackendAndMaxUtilization(t *testing.T) {
+	serviceName := fmt.Sprintf("tf-test-%s", randString(t, 10))
+	igName := fmt.Sprintf("tf-test-%s", randString(t, 10))
+	itName := fmt.Sprintf("tf-test-%s", randString(t, 10))
+	checkName := fmt.Sprintf("tf-test-%s", randString(t, 10))
+	vcrTest(t, resource.TestCase{
+		PreCheck:     func() { testAccPreCheck(t) },
+		Providers:    testAccProviders,
+		CheckDestroy: testAccCheckComputeBackendServiceDestroyProducer(t),
+		Steps: []resource.TestStep{
+			resource.TestStep{
+				Config: testAccComputeBackendService_withBackend(
+					serviceName, igName, itName, checkName, 10),
+			},
+			resource.TestStep{
+				ResourceName:            "google_compute_backend_service.lipsum",
+				ImportState:             true,
+				ImportStateVerify:       true,
+			},
+			resource.TestStep{
+				Config: testAccComputeBackendService_withBackendAndMaxUtilization(
+					serviceName, igName, itName, checkName, 10),
+				PlanOnly: true,
+				ExpectNonEmptyPlan: true,
+			},
+			resource.TestStep{
+				Config: testAccComputeBackendService_withBackendAndMaxUtilization(
+					serviceName, igName, itName, checkName, 10),
+			},
+			resource.TestStep{
+				ResourceName:      "google_compute_backend_service.lipsum",
+				ImportState:       true,
+				ImportStateVerify: true,
+			},
+		},
+	})
+}
+
 func TestAccComputeBackendService_withBackendAndIAP(t *testing.T) {
 	serviceName := fmt.Sprintf("tf-test-%s", randString(t, 10))
 	igName := fmt.Sprintf("tf-test-%s", randString(t, 10))
@@ -941,6 +979,64 @@ resource "google_compute_http_health_check" "default" {
 `, serviceName, timeout, igName, itName, checkName)
 }
 
+func testAccComputeBackendService_withBackendAndMaxUtilization(
+	serviceName, igName, itName, checkName string, timeout int64) string {
+	return fmt.Sprintf(`
+data "google_compute_image" "my_image" {
+  family  = "debian-9"
+  project = "debian-cloud"
+}
+
+resource "google_compute_backend_service" "lipsum" {
+  name        = "%s"
+  description = "Hello World 1234"
+  port_name   = "http"
+  protocol    = "HTTP"
+  timeout_sec = %v
+
+  backend {
+    group           = google_compute_instance_group_manager.foobar.instance_group
+    max_utilization = 1.0
+  }
+
+  health_checks = [google_compute_http_health_check.default.self_link]
+}
+
+resource "google_compute_instance_group_manager" "foobar" {
+  name = "%s"
+  version {
+    instance_template = google_compute_instance_template.foobar.self_link
+    name              = "primary"
+  }
+  base_instance_name = "foobar"
+  zone               = "us-central1-f"
+  target_size        = 1
+}
+
+resource "google_compute_instance_template" "foobar" {
+  name         = "%s"
+  machine_type = "e2-medium"
+
+  network_interface {
+    network = "default"
+  }
+
+  disk {
+    source_image = data.google_compute_image.my_image.self_link
+    auto_delete  = true
+    boot         = true
+  }
+}
+
+resource "google_compute_http_health_check" "default" {
+  name               = "%s"
+  request_path       = "/"
+  check_interval_sec = 1
+  timeout_sec        = 1
+}
+`, serviceName, timeout, igName, itName, checkName)
+}
+
 func testAccComputeBackendService_withBackendAndIAP(
 	serviceName, igName, itName, checkName string, timeout int64) string {
 	return fmt.Sprintf(`