On October 17, 2022, a Maryland state judge in the Circuit Court of Anne Arundel County struck down the stateâs Digital Advertising Tax (âDigital Ad Taxâ) as violating the Internet Tax Freedom Act (âITFAâ) 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 March 4, 2022, a federal judge ruled that the federal Tax Injunction Act (âTIAâ) bars a challenge to Marylandâs Digital Advertising Gross Revenues Tax (âDigital Ad Taxâ) from proceeding in federal district court, but does not bar the plaintiffs from challenging Marylandâs prohibition on passing the tax to a customer âby means of a separate fee, surcharge, or line-itemâ (the âPass-Through Prohibitionâ). Chamber of Commerce of the United States of America v. Franchot, No.…
Connecticut legislative leaders recently announced support for a digital advertising tax (âConnecticut Digital Advertising Taxâ) proposed by the Connecticut Joint Committee on Finance, Revenue and Bonding (the âFinance Committeeâ). Connecticut joins Maryland, Massachusetts, New York, and Texas, among others, as states with concrete digital advertising tax proposals on the table (and in Marylandâs case, an enacted law).
State legislators in the Massachusetts House of Representatives recently introduced four bills on the taxation of digital advertising services. Two of these bills propose a tax on digital advertising services, a third bill would set up a âspecial commissionâ to study how to generate revenue from digital advertising, and a fourth bill appears to be a placeholder for some action on digital advertising taxation. This makes Massachusetts one of the latest states to join the wave of state digital advertising tax proposals targeting large digital advertising service providers. We have previously covered Marylandâs digital advertising tax, the first in the nation to become law, and various other statesâ pending digital and data tax proposals, including New York and Texas. Below, we summarize and compare the various Massachusetts proposals.