Maryland Supreme Court Urged To Strike Down Digital Ad Tax

Comcast and Verizon urged Maryland's highest court to strike down a 2021 law that imposes a tax on some digital ads, arguing both that the statute violates the Constitution, and that it conflicts with a 1998 federal law. The hearing centered on a 2021 Maryland law that imposes taxes on some online companies with more than $100 million in digital ad revenue. Rates vary from 2.5% to 10% of revenue attributable to Maryland, with the percentage tied to global revenue. The bill, aimed at large tech companies including Google and Facebook, was enacted over the veto of former Governor Larry Hogan (R-MD). After lawmakers overrode the veto, they amended the bill to add a provision exempting from the tax “news media entities” that sell digital ads. The measure defines news media entities as entities “engaged primarily in the business of newsgathering, reporting, or publishing articles or commentary about news, current events, culture, or other matters of public interest.” Comcast and Verizon challenged that law in state court.