Maryland Supreme Court to hear digital ad tax case appeal

The Maryland Supreme Court will hear an appeal of a lower court’s ruling that the state’s first-in-the-nation tax on digital is unconstitutional. The court announced Friday that it will hear an appeal from Maryland’s comptroller in May.

Anne Arundel County Circuit Court Judge Alison Asti ruled in October that the Maryland law violates the US Constitution’s prohibition on state interference with interstate commerce. She also ruled that it violates the federal Internet Tax Freedom Act, which prohibits discrimination against electronic commerce.

Maryland lawmakers overrode then-Gov. Larry Hogan’s veto of the measure to pass the legislation in 2021. The state estimated the tax on digital advertising could raise about $250 million a year to help pay for a sweeping K-12 education measure.

Verizon Media Inc. and Comcast challenged the law in the state’s court.

The law would have taxed revenue that the affected companies make on digital advertisements shown in Maryland. Attorneys for Big Tech companies like Facebook, Google and Amazon have contended the law unfairly targets the companies. It would impose a tax based on global annual gross revenues for companies that make more than $100 million globally.

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