Digital Advertising

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We have recently learned from taxpayers that filed refund claims of the Maryland Digital Advertising Tax (DAT) that the Maryland Comptroller is issuing responses entitled “Request Received Does Not Constitute a Refund Claim.”  The Comptroller’s notices state that it rejects refund claims if they do not “disclose[ ] sufficient information about the taxpayer’s annual gross…

The Maryland Comptroller issued an interpretation of the Maryland Digital Advertising Tax (DAT) that excludes certain digital advertising from the DAT. A Maryland regulation – COMAR 03.12.01.01 – limits taxable “digital advertising services” to those “advertising services on a digital interface that are: (i) Programmatic; and (ii) Visually conveyed.” Thus, receipts from sales of digital…

The Utah State Legislature is poised to enact a “targeted advertising” tax, the first of its kind in the U.S. This tax is similar to, but distinct from, Maryland’s digital advertising gross revenues tax and Chicago’s social media amusement tax.

The legislation enacting the tax, S.B. 287, has been agreed-upon by both chambers and…

On May 1, 2024, California Senator Steve Glazer, Chair of the Senate Revenue and Taxation Committee, unveiled another proposal to tax digital advertising. This time, Senator Glazer proposes to amend California Senate Bill 1327 to impose a 7.25% tax on “data extraction transactions in the state.”[1] This “data extraction transactions tax” (referred to as the…

On April 1, 2024, the California State Assembly amended a digital advertising tax into A.B. 2829, formerly a property tax bill. As amended, A.B. 2829 would adopt the digital advertising tax effective January 1, 2025. The California proposal is similar to the Maryland Digital Advertising Gross Revenues Tax, which is currently the subject of…

The Comptroller has informed us that the due date for the first quarterly estimated digital advertising tax payment is extended to Monday, April 18th. The deadline for taxpayers to make this first payment would otherwise have been April 15, 2022. We are not aware of the Maryland Comptroller’s office otherwise publicizing this extension. Taxpayers…

On March 4, 2022, the United States District Court for the District of Maryland partially dismissed a challenge to the Maryland Digital Advertising Gross Revenues Tax.

  • The plaintiffs asserted that the Tax violates the Internet Tax Freedom Act and the Commerce and Due Process Clauses of the United States Constitution.
  • The federal court held that

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Following on Maryland’s heels, there are currently five separate digital advertising tax measures pending before the Massachusetts legislature. H. 2894 would impose a 5% tax on the annual digital advertising revenue from companies generating more than $25 million in digital advertising sales in Massachusetts. H. 2928 would not impose a tax directly, but would create…

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…