4As Submits Comments on Proposed Regs. for Implementing Maryland Digital Ad Tax

On November 8, the 4As submitted written comments to the proposed regulations issued by the Maryland Comptroller to guide implementation of the state’s new digital advertising tax. The nation’s first digital advertising tax impacts large companies that sell digital advertising and is imposed on a graduated scale (from 2.5% to 10%) based on total global revenue. Taxation does not accrue for any entity with less than $1 million of gross digital advertising revenues in Maryland and $100 million in annual gross revenues.

Important for agencies, earlier this year the legislation’s lead Senate sponsor and President of the Maryland Senate, Bill Ferguson (D-46), clarified that he doesn’t believe that the tax would be levied against a company reselling ad space to a marketer client; instead, he explained that the legislative intention of the bill is to tax the digital company selling the original advertising space (i.e. Facebook, Google, etc.).

Maryland’s digital advertising tax is scheduled to take effect on January 1 2022, if it does not fall to any of the serious legal challenges facing it in the courts. Final regulations on implementation of the Maryland digital advertising tax could be expected as early as late December 2021.

For any questions or to learn more, please reach out to Alison Pepper, 4As, EVP – Government Relations, at [email protected].