ANNAPOLIS, MD (AP) – A Maryland state tax court has struck down the state’s tax on digital advertising. The court says the tax violates the federal Internet Tax Freedom Act and parts of the U.S. Constitution. The decision orders the state of Maryland to repay digital ad tax money collected from companies like Apple and Google. Maryland introduced the tax in 2021 to fund education, expecting to raise $250 million annually. The law targeted large companies with global revenues over $100 million. Maryland officials disagree with the ruling and plan to continue the legal fight. The tax court said Congress – not the state legislature – is tasked with regulating interstate commerce, and that the tax law was inappropriately based on global revenue rather than revenue from in-state advertising. The case has been closely watched by other states considering similar taxes.
