State legislators have already proposed a number of digital and data tax bills in 2021, some of which are new proposals while others reintroduce proposals from previous legislative sessions. The proposed bills fall into one of three categories: taxes on digital advertising services, taxes (or fees) targeting social media providers, and taxes on the sale or monetization of personal data. Most of the proposals are in the early stages, but a Maryland bill originally introduced last year is moving closer to a legislative vote on whether to override the governor’s veto.
Several states continue to move forward with the taxation of digital advertising and new tax proposals have entered the fray. We last updated you on the attempts by Maryland, Nebraska, and New York. Nebraska had a hearing on its sales tax bill in February, with relatively little movement after that. In contrast, Maryland and New York have continued their move towards imposing taxes on digital advertising in some form and West Virginia has entered the mix.