Last week, a Maryland state senator introduced a bill to tax revenue from digital ads shown to Marylanders. Proceeds of the tax would fund education, but the bill may have been celebrated not only by educators and parents in Maryland, but also by government officials in Paris, because it undermines efforts by the Treasury Department and Congress to persuade France that its own digital tax not only discriminates against U.S. companies, but also represents bad policy. The proposed Maryland tax also may violate the federal Internet Tax Freedom Act. This federal law prohibits “multiple or discriminatory taxes on electronic commerce,” and it could be read to prevent Maryland from imposing more or higher taxes on digital ads than ads delivered through other mediums, such as print, radio, or television.
Ruth Mason, Maryland’s Proposed Digital Tax May Be Unconstitutional, Medium (January 30, 2020).