Maryland tax court voids digital ad tax, orders refunds to Apple, Google and Peacock TV
Summary
A Maryland state tax court canceled the state’s digital advertising tax and ordered refunds to Apple, Google, and Peacock TV. The court ruled the tax broke federal and constitutional rules, including the Internet Tax Freedom Act and protections for free speech and commerce.Key Facts
- Maryland’s tax court struck down the state’s digital advertising tax passed in 2021.
- The tax applied to large companies making over $100 million globally from digital ads shown in Maryland.
- Tax rates ranged from 2.5% to 10%, increasing with the company’s global revenue.
- Big tech companies like Apple, Google, and Peacock TV must be refunded tax payments they made.
- The court said the tax violated the Internet Tax Freedom Act, the First Amendment, and constitutional commerce and due process rules.
- The tax was challenged partly because it blocked companies from informing customers about the tax, violating free speech rights.
- Maryland officials disagree with the ruling and plan to continue legal efforts to keep the tax.
- The court emphasized that Congress oversees interstate commerce, so states cannot tax global revenue from digital ads.
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