United States of America: Issued decision annulling Bill introducing tax on revenues from digital advertising services
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Description
Issued decision annulling Bill introducing tax on revenues from digital advertising services
On 17 October 2022, a judge from the Circuit Court of Anne Arundel County ruled that the Maryland Digital Advertising Tax was not in line with the constitutional and federal regulations in the United States. In particular, it was noted that the Bill violates the Commerce Clause, the Internet Tax Freedom Act (IFTA), and the First Amendment. The Court, therefore, sided with its plaintiffs, Verizon Media and Comcast. The Digital Tax Bill cannot support IFTA, as the Bill only applies to digital advertising. The Commerce Clause is also not enforced with the Bill because it restricts trade between states, targets specific companies, and calculates the tax rates based on global annual revenues.
Original sourceScope
Policy Area
Taxation
Policy Instrument
Direct taxes including Digital Service Taxes
Regulated Economic Activity
online advertising provider
Implementation Level
subnational
Government Branch
judiciary
Government Body
court
Complete timeline of this policy change
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2020-03-18
adopted
2020-05-20
rejected
2021-02-12
in force
2021-05-30
adopted
2021-12-31
in force
2022-10-17
revoked