Costs may be passed down by big tech to small businesses advertising on the web
The Maryland House and Senate voted late last week to override Governor Larry Hogan’s veto of a bill that taxes big tech companies like Google, Amazon, and Facebook for the online ads they sell which are seen in Maryland.
NFIB has repeatedly spoken out against that legislation because we firmly believe the cost of the tax will be passed down by the tech companies to those purchasing the advertisements, which in large part, are small businesses. Just as Maryland’s small businesses are attempting to come back from pandemic-related losses they are even more likely to turn to online advertising to bring back customers and increase revenues.
Maryland will have the unique distinction of being the first state in the country to enact such a tax. It is believed there will be numerous legal challenges. Other states will be paying close attention to those presumptive lawsuits as they struggle for new revenue streams to plug holes in operating budgets decimated by the pandemic.
The General Assembly is planning to pass an additional bill soon to clarify that the digital ad tax must not allow tech companies to directly pass that tax along to businesses buying ads. But NFIB is concerned any such legislation could be circumvented by simply raising the price of digital ads.
We will continue to monitor this issue in Annapolis and keep our members apprised.