In the December 3, 2021 issue of the Maryland Register, the Comptroller confirmed that it adopted regulations to the Digital Advertising Gross Revenues Tax on November 24, 2021. Despite robust comments provided to the proposed regulations (including those provided by Eversheds Sutherland), the Comptroller made almost no changes in the final version.  The Comptroller’s final regulations use a device-based apportionment fraction to determine when digital advertising is attributable to Maryland.


Effective on January 1, 2022, the digital advertising tax is imposed on the annual gross revenues of a person derived from digital advertising services in Maryland. Md. Code Ann., Tax-Gen. § 7.5-102(a). The General Assembly directed the Comptroller to “adopt regulations that determine the state from which revenues from digital advertising services are derived.” Md. Code Ann., Tax-Gen. § 7.5-102(b)(2).  In response, the Comptroller filed the proposed sourcing regulations on August 31, 2021.

Notice of Final Action

The Comptroller only made two “nonsubstantive changes” to the proposed regulations:

  • In addition to technical information, the proposed regulation allowed taxpayers to determine the devices’ locations based on “the terms of the underlying contract for digital advertising services.” The Comptroller revised the provision to instead refer to “nontechnical information included in the contract for digital advertising services.” The term “nontechnical information” is not defined.
  • The Comptroller added “industry standard metrics” to the non-exhaustive list of “technical information.” While the Comptroller does not expand on which industry standard metrics it would accept to determine device location, this change may present taxpayers with an option to use industry information to determine Maryland digital advertising.

The regulations’ effective date is December 13, 2021, which is shortly before the digital advertising tax’s January 1, 2022 effective date.