Maryland Appeals Digital Advertising Tax Ruling Amid Industry Backlash
Google LLC, Apple Inc., and Peacock TV LLC are taking their fight against Maryland's digital advertising tax to court. In documents obtained by Bloomberg Law, the state has asked a trial court to unwind rulings that struck down the tax on grounds it unconstitutionally discriminates against large out-of-state companies.
The Maryland Tax Court held in August that the tax is preempted by the federal Internet Tax Freedom Act (ITFA), which prohibits states from singling out electronic commerce for taxation. This ruling has significant implications, providing parties challenging similar taxes with useful analysis of this relatively untested law.
Similar taxes being implemented across the country are now under scrutiny as a result of this decision. The state is asking the court to reconsider its previous rulings and potentially overturn them, paving the way for Maryland's tax on digital advertising to go into effect.