A state tax court in Maryland invalidated the nation’s first state tax on digital advertising and directed state officials to refund tax payments already collected from major tech companies.
The legal dispute had been closely watched by other states that are considering taxing online advertisements.
The Annapolis-based Maryland Tax Court ruled on Aug. 14 that the digital advertising gross revenues tax was unconstitutional after it was challenged in three separate lawsuits by Google, Apple, and Peacock TV. Refunds are expected to run into the hundreds of millions of dollars.
The state imposes the levies based on the businesses’ global revenue. Lawmakers previously said the tax could raise $250 million per year. The money raised from the tax was earmarked for a state education program….