The Maryland digital advertising tax, applied to gross revenue derived from digital advertising services, has a rate escalating from 2.5 percent to 10 percent of the advertising platform’s assessable base based on its annual gross revenues from all sources (i.e., not just digital advertising, and not just in Maryland). The escalating rate scale works to exclude from the tax any entity with less than $1 million of gross revenues from digital advertising services in Maryland and $100 million in annual gross revenues. It is not a typical progressive tax, inasmuch as the rate applies to all taxed activity, not just the marginal amount. The enabling legislation grants significant authority to the Comptroller of the Treasury to develop regulations implementing the tax, and it is on these draft regulations that the Tax Foundation submits comment.
Source Tax Foundation
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