Court to Consider First Amendment Challenge to Maryland's Digital Ad Tax

The law, contested by Big Tech, could raise $250 million annually for education

A federal appeals court has directed a lower court to consider a First Amendment challenge to Maryland's digital advertising tax, which is the first of its kind in the nation.
The law, which taxes companies like Facebook and Google for money they make from digital ads, has been contested by attorneys for Big Tech who argue that it unfairly targets their companies.
The law prohibits these companies from passing along costs to customers who buy ads, a provision that plaintiffs argue violates the First Amendment.
Three other challenges to the law, brought under the Internet Tax Freedom Act, the Commerce Clause and the Due Process Clause, were dismissed by the appeals court.
Maryland's digital ad tax, which was passed in 2021 over a veto from then-Gov. Larry Hogan, is estimated to raise about $250 million a year to fund a sweeping K-12 education measure.