States mimicking Maryland’s first-in-the-nation digital advertising tax may be tempted to celebrate the Maryland Supreme Court reversing a lower court’s ruling by throwing the tax out, but the reality is while Maryland won a short reprieve on the basis of legal technicalities, those thinking this ruling gives a green light to tax digital advertising are in for a rude awakening. The lame duck tax, that is almost certainly legally doomed, sets the state up as blatantly business-unfriendly, and should not suggest to others can copy without consequence.
Where the law stands and why it matters: The recent ruling by the Maryland Supreme Court did not address the substantive arguments or the constitutionality of the case, but instead sent the case back to Circuit Court to vacate the decision, stating that the plaintiffs failed to exhaust their administrative remedies. This first-in-the-nation tax on digital advertising is yet another onerous cost of doing business in Maryland.
