Maryland is the first state in America to impose a digital advertising tax, targeting major tech companies such as Amazon, Google, and Facebook.
The law applies to companies with global revenues exceeding $100 million, imposing a tax rate of 2.5% on the company's income from selling digital advertising services in the state. The tax rate rises to 10% for companies that generate over $15 billion, which will affect both Facebook and Google. Republican Larry Hogan, the governor of Maryland, vetoed the bill; however, the Democrat-controlled legislature overrode the veto.
Maryland Attorney General Brian Frosh stated last year that there are some risks that could lead to the law being overturned. Many legislators explained that Silicon Valley companies, whose stock prices surged during the pandemic, are not paying their fair share at a time when state budgets are strained due to the economic downturn caused by the pandemic. State Senator Bill Ferguson stated that tech companies profit from collecting data on Maryland residents to provide them with targeted advertisements, for which large companies should pay.
