Archive · 15 Aug 2025
Maryland's Digital Ad Tax Provision Declared Unconstitutional
Imagine Maryland made a new tax on online ads, like the ones you see on websites.
They also made a rule saying companies couldn't tell their customers why prices might go up because of this tax.
A court said this rule was wrong because it stopped companies from talking about the government, which is important.
The court believed companies should be able to explain how taxes affect prices.
Now, the case goes back to another court to figure out what should happen next.
A federal appeals court ruled against a Maryland law restricting companies from explaining digital ad tax cost increases to customers.
The court sided with the Chamber of Commerce and other trade groups, stating the law violated free speech rights.
Maryland's 2021 law taxed digital ad services generating over $1 million in revenue.
The law imposed levies based on companies' global revenue and aimed to raise $250 million annually.
The court sent the case back to a lower court to determine appropriate remedies.
- Who
- The 4th U.S. Circuit Court of Appeals, Chamber of Commerce, and Maryland.
- What
- A federal appeals court declared unconstitutional a part of Maryland's digital advertising tax law.
- When
- Friday, the date of the ruling was not specified.
- Where
- Maryland and the 4th U.S. Circuit Court of Appeals in Richmond, Virginia.
- Why
- The court determined the law violated First Amendment free speech rights by preventing companies from explaining tax-related price increases to customers.
Maryland's Stance
Trade Groups' Stance
Freedom of Speech vs. Revenue Generation
Maryland's Stance
The law aimed to generate revenue for the state through a tax on digital advertising.
Trade Groups' Stance
The law, by prohibiting companies from informing customers about tax-related price increases, stifled free speech.
- Plaintiff
- Chamber of Commerce, NetChoice, and Computer & Communications Industry Association
- Defendant
- Maryland Comptroller Brooke Lierman
- Law in Question
- Maryland's digital advertising tax
- Tax Target
- Companies with $1M+ in digital ad revenue
- Ruling
- Violation of First Amendment
- Case Number
- 24-1727