A Maryland state tax court has struck down the state’s first-in-the-nation tax on digital advertising and ordered state officials to repay the tax money already collected from big tech firms. The court said the tax violates the federal Internet Tax Freedom Act as well as the First Amendment and the commerce and due process clauses of the US Constitution.
The legal fight has been watched by other states considering similar taxes. Maryland estimated the tax, approved in 2021, could raise about USD 250 million a year. The court ordered the state to repay tax money collected from Apple, Google and Peacock TV. Companies making more than USD 100 million in global annual gross revenues were taxed at a 2.5 per cent rate.
