Judge Strikes Down Digital Tax

Date: October 20, 2022

Maryland's Advertising tax deemed unconstitutional

In a victory for small business, an Anne Arundel County Circuit Court judge struck down Maryland’s tax on digital advertising this week. In her ruling, Judge Alison L. Asti said the tax violates the U.S. Constitution’s prohibition on state interference with interstate commerce and discriminates against certain online companies while not taxing others.

NFIB lobbied hard against the proposal when it passed the General Assembly in 2021, arguing it would raise the cost of doing business for small employers using digital platforms to advertise themselves.

Ultimately, the legislature ignored the warning of the business community, passed the bill, and then overrode Governor Hogan’s veto. According to bill sponsors, the bill would have raised $250 million in taxes.

The statute is also facing a challenge in U.S. District Court in Baltimore.

Please contact state director Mike O’Halloran with any questions.

Related Content: Small Business News | Maryland

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