Maryland Tax Court Voids 2021 Digital Ad Tax, Orders Refunds to Apple, Google and Peacock
Updated
Updated · POLITICO · Aug 17
Maryland Tax Court Voids 2021 Digital Ad Tax, Orders Refunds to Apple, Google and Peacock
3 articles · Updated · POLITICO · Aug 17
Summary
Friday’s ruling said Maryland’s first-in-the-nation digital advertising tax was illegal and ordered the state to reimburse Apple, Google and Peacock for payments made under the levy.
The tax court found the measure violated the Internet Tax Freedom Act and multiple constitutional protections, including the First Amendment and limits on state interference with interstate commerce.
Maryland can still appeal, and top state lawmakers said they disagreed with the decision even as the tax has faced legal doubts since before its 2021 enactment.
A unanimous 4th U.S. Circuit panel already said last year that the law infringed companies’ free-speech rights, adding to a series of setbacks for the tax.
The ruling could ripple beyond Maryland because Illinois and Utah enacted similar taxes this year, though supporters argue states still need new ways to tax a digital ad market worth roughly $250 million a year to Maryland.