A federal appeals court ruled that Maryland's tax on digital advertising violated the Constitution by restricting companies, like Meta and Google, from informing customers about the tax's impact on pricing. The tax aimed to raise revenue for K-12 education but was seen as unfairly targeting large tech companies. The law prohibited these companies from disclosing how the tax influenced costs, hindering political discourse. The 4th U.S. Circuit Court of Appeals emphasized that states cannot prevent criticism by silencing those impacted by taxation, thereby preserving free speech rights.
Maryland's first-in-the-nation tax on digital advertising has been ruled unconstitutional by a federal appeals court, citing violations of free speech rights for companies.
Supporters argue the tax aims to modernize tax methods to address significant changes in online advertising while opponents claim the law targets large tech companies unfairly.
The court emphasized that the law's restrictions on companies communicating the tax's impact on pricing were attempts to prevent criticism, undermining democratic discourse.
Judge Julius Richardson pointed to historical conflicts over taxation, asserting that states cannot inhibit criticism by silencing affected parties, highlighting the importance of transparency in taxation.
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