Maryland Tax Court Strikes Down Digital Ad Tax, Orders Repayments to Big Tech Firms

A Maryland state tax court has struck down the state's first-in-the-nation digital advertising tax, ruling that it violates federal law and the US Constitution.

The tax, which targeted big tech firms like Apple, Google, and Peacock, was enacted in 2020 as part of a broader effort to raise revenue for the state. However, the Maryland Tax Court found that the tax infringes on free speech protections under the First Amendment and also violates the Internet Tax Freedom Act.

The court's decision has significant implications for other states considering similar taxes, which have been touted as a way to generate new revenue streams in the digital economy. The ruling could set a precedent for challenges to these types of taxes at the state level.