A federal appeals court ruled Maryland's digital advertising tax unconstitutional, violating companies' free speech rights by preventing them from informing customers about the tax's effects. The law targeted large tech companies, with supporters arguing it was necessary to reflect changes in advertising practices. The tax aimed to raise approximately $250 million for K-12 education but restricted companies from mentioning surcharges. The court emphasized the significance of allowing criticism of government taxation, reiterating that lawmakers cannot shield themselves from accountability by silencing affected parties. The case may influence other states considering similar taxes.
Maryland's first-in-the-nation tax on digital advertising violated the Constitution, as blocking Big Tech from informing customers about the tax infringes on their free speech rights.
Supporters argue the tax is necessary due to the changing advertising landscape, targeting large companies like Google and Meta who claim they are unfairly singled out.
Maryland's law required companies to avoid informing customers about the tax's impact on pricing, which the 4th Circuit Court found unconstitutional, citing the importance of public discourse.
If the tax is labeled legally, Maryland's lawmakers cannot, as stated by the judge, protect themselves from criticism by silencing those impacted by it.
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