A first-of-its-kind state tax on some digital ads has been struck down as a violation of the federal Internet Tax Freedom Act by the Maryland Tax Court. The decision related to three challenges to the tax by Apple, Google, and Peacock TV, a streaming service.
Tax Details
The 2021 law targets big tech firms, including Apple, Meta, and Google. Under the law, companies reporting gross global annual revenue of at least $100 million are subject to a 2.5% levy. The tax increases in increments of 2.5% to a maximum rate of 10% levied against companies reporting more than $15 billion in gross global revenue.
The state could collect as much as $250 million annually from the digital ad tax, according to a legislative analysis. The funds are earmarked for the state’s education reform program. In October, the comptroller’s office reported it had collected more than $400 million related to the tax.
Doug Mayer, president of Americans for Digital Opportunity, hailed the decision, stating that digital advertising taxes are illegal on multiple levels. He emphasized that if elected officials want to increase revenue, they should empower entrepreneurs, not concoct illegal taxes that stifle the economy.
Original reporting: Alexandria, VA News – WTOP News — read the source article.
