by Jeffrey Marks
Readers of this blog may recall that in February 2021, Maryland became
the first U.S. state to enact a tax on digital advertising services,
which was summarized here(1), noting that it was sure to face heavy
opposition on several fronts, including arguments that it (i) violated
the Internet Tax Freedom Act ("ITFA"), a federal law which prohibits discriminatory taxes on electronic commerce, (ii) failed a dormant
Commerce Clause analysis under the U.S. Constitution by setting rates
based on the worldwide gross revenues of advertising platforms --
economic activity that has nothing to do with Maryland -- and targets
specific companies (including Amazon, Facebook and Google), and (ii)
would disproportionately harm Maryland businesses.
Sure enough, in October 2022, a Maryland state judge struck down the
tax, concluding that it (i) discriminates against electronic commerce
in violation of ITFA because it applies to digital advertising, but
not traditional advertising, (ii) violates the Commerce Clause of the
U.S. Constitution, which prevents states from enacting legislation
that discriminates against or unduly burdens interstate commerce, and
(iii) violates the First and Fourteenth Amendments of the U.S. Con-
stitution because it "singles out the Plaintiffs for selective
taxation and is not content-neutral." 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 County). This decision was discussed in a prior post here(2).
1.
https://tinyurl.com/5xjscvjc
2.
https://tinyurl.com/2v7z4jz6
https://www.mondaq.com/article/news/1316156?q=1803232&n=792&tp=4&tlk=1&lk=31
--- SoupGate-Win32 v1.05
* Origin: fsxNet Usenet Gateway (21:1/5)