ANNAPOLIS, MD—The Maryland Freedom Caucus on Tuesday applauded a federal court ruling that struck down a key part of the state’s digital advertising tax, a law it had opposed since its inception.
The Fourth Circuit Court of Appeals recently overturned a provision of the tax, which was enacted in 2020 after the General Assembly overrode a veto by then-Gov. Larry Hogan.
“The court confirmed what we said from day one: this tax is unconstitutional, reckless, and destined to fail,” said Matt Morgan, chairman of the Maryland Freedom Caucus.
The caucus, a group of conservative Republican state lawmakers, has long argued the tax was a flawed and unconstitutional effort to raise revenue for the Blueprint for Maryland’s Future education program. The law, which sought to tax the gross revenues of large tech companies from digital advertising services in the state, was projected to generate up to $250 million annually but has consistently failed to meet that target.
“Instead of strengthening Maryland’s economy, the Democrat supermajority pushed through a radical scheme to shake down tech companies only to waste millions of taxpayer dollars defending a law that was doomed in the courts,” Morgan said.
Kathy Szeliga, vice chair of the caucus, criticized the tax as an example of “fiscal malpractice.”
“Maryland families are on the hook not only for the tax dollars already spent that must be refunded, but for years of legal fees,” she stated.
The caucus is now demanding that the Attorney General’s Office and the Comptroller’s Office provide transparency on the total amount collected, the funds at risk of being refunded, and the state’s legal costs incurred while defending the law. The group concluded its statement with the phrase, “We told you so.”
The letter sent to Attorney General Anthony G. Brown can be viewed here (PDF). The letter sent to Comptroller Brooke Lierman can be viewed here (PDF).
Photo by Sora Shimazaki from Pexels
