On October 17, 2022, a Maryland state judge in the Circuit Court of Anne Arundel County struck down the state’s Digital Advertising Tax (“Digital Ad Tax”) as violating the Internet Tax Freedom Act (“ITFA”) and the Commerce Clause and First Amendment of the U.S. Constitution. Comcast of California/Maryland/Pennsylvania/Virginia/West Virginia LLC, et al. v. Comptroller of the Treasury of Maryland, Case No. C-02-CV-21-000509 (Md. Cir. Ct. Anne Arundel Cnty.). The judge issued her ruling from the…
On September 8, 2022, the Louisiana Board of Tax Appeals (“Board”) granted a taxpayer’s motion for summary judgment in a case involving whether the taxpayer qualified as a manufacturer for purposes of Louisiana’s apportionment provisions. Cervey LLC, f/k/a New – Tech Computer Systems LLC v. Secretary of Department of Revenue, Louisiana, La. BTA Docket No. 12272D (Sept. 8, 2022). The taxpayer’s business consisted primarily of three types of software: (1) software for maintaining health records…
On March 4, 2022, a federal judge ruled that the federal Tax Injunction Act (“TIA”) bars a challenge to Maryland’s Digital Advertising Gross Revenues Tax (“Digital Ad Tax”) from proceeding in federal district court, but does not bar the plaintiffs from challenging Maryland’s prohibition on passing the tax to a customer “by means of a separate fee, surcharge, or line-item” (the “Pass-Through Prohibition”). Chamber of Commerce of the United States of America v. Franchot, No.…
In Siemens USA Holdings Inc. v. Geisenberger, No. 20-2991 (3d Cir. 2021), the Third Circuit found that the District Court erred (1) in holding that Siemens’ preemption claim was unripe, and (2) in denying Siemens’ motion for a preliminary injunction. Both the question of ripeness and the injunction request related to whether the escheat priority rules preempted certain audit procedures, as opposed to the validity of an assessment. Specifically, Siemens brought the lawsuit claiming, among…