Maryland Passes Digital Advertising Tax

This information is provided to us by DSF Member Gary Kibel from Davis & Gilbert, LLP.

The hits keep coming for the digital media industry!  Below is an Alert discussing Maryland’s newly passed digital advertising services tax, which will impose a requirement for businesses involved in digital advertising that may be displayed in Maryland to pay tax rates on annual revenue that comes from digital advertising.

Businesses that may have revenue “derived from” digital advertising should consult with their tax advisors concerning forthcoming changes in the law, regulations, and legal challenges to see how Maryland’s digital advertising tax and potential imitators may affect them.

After more than a year of contention, Maryland’s proposed digital advertising services tax has become law (the Act). On February 12, 2021 the Maryland Senate voted to override Governor Hogan’s previous veto of the legislation. The Act requires “persons” to pay a tax at rates between 2.5 percent and 10 percent on “annual gross revenues [of such person] derived from digital advertising in the state [of Maryland].” However, due to vague drafting, who must pay — and how much — remains uncertain in many cases.

Digital Advertising Services Tax

The definition of “digital advertising services” is open-ended. The Act provides only that it “includes” (but presumably is not limited to) “advertisement services on a digital interface” meaning “any type of software, including a website,” including “banner advertisements and also search engine advertising, interstitial advertising, and other comparable advertising services.”

To view the full alert, please visit:

Thank you to Gary Kibel and Davis & Gilbert LLP for their contributions.

Gary Kibel, Davis & Gilbert LLC