Maryland General Assembly Passes Digital Tax Bill

Maryland’s proposed digital tax passed the legislature 88-47 as the Maryland House concurred with the Senate-amended HB-732, originally just a tobacco tax bill. Advertisers and others say a lawsuit over the measure is possible, if enacted (see 2003170057). The bill would impose taxes on annual gross revenue from digital ad services, ranging from 2.5% to 10%, for companies exceeding $100 million annual revenue. On the floor Wednesday, Del. Daniel Cox (R) asked if the proposed digital tax violates federal law. That would be up to the courts, but Maryland’s attorney general was consulted, replied bill sponsor Del. Eric Luedtke (D). Cox asked how it would be taxed in Maryland alone. The state comptroller will determine that, said Luedtke. Lawmakers want the tax to help fund state education, but the plan “is more likely to result in legal bills than increased funding for education,” the Free State Foundation blogged Friday. The bill goes to Gov. Larry Hogan, a Republican who has said he’s generally against raising taxes.