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Tax Law

Legal Alert: Maryland State Senate’s Budget and Taxation Committee Hears Testimony on Proposed Digital Advertising Tax

On January 29, 2020, the Maryland State Senate’s Budget and Taxation Committee heard testimony on Senate Bill 2, which would create the Digital Advertising Gross Revenues Tax. The tax would be imposed on a taxpayer’s Maryland gross revenues from digital advertising services at up to a 10% rate. After brief introductions by the bill’s sponsors – Senators Miller and Ferguson – the Committee heard testimony from an additional twenty-one witnesses. An archived video of the hearing is available here.

Senators Miller and Ferguson emphasized that the purpose of Senate Bill 2 is to fund the state’s public education initiative. It is one of numerous bills being considered to pay for this initiative.

The most notable witness in support of the bill was Professor Paul Romer, an economist who wrote a New York Times opinion last year that advocated for a tax on targeted digital advertising. However, his comments were dedicated to combating targeted advertisements via this tax, rather than on bringing in additional tax revenue for the state of Maryland from broadly taxing all digital advertising.

Read the full Legal Alert here.