Fourth Circuit Overturns Maryland’s Digital Ad Tax Itemization Ban: Implications for Business Transparency

• Fourth Circuit ruled against Maryland’s ban on itemizing Digital Advertising Tax on invoices
• The ruling impacts digital advertisers and raises issues of tax compliance and transparency
• Maryland was the first state to impose a tax on digital advertising services in 2021
• The tax targets large companies with digital marketing revenues
• The law faced constitutional challenges under the Commerce Clause and First Amendment
• A provision prohibited sellers from showing the tax as a separate line item on invoices
• Businesses could only increase prices to cover the tax indirectly
• The U.S. Chamber of Commerce argued the ban restricted free speech
• The Fourth Circuit found the law restricted protected speech and was content-based
• The court ruled the prohibition could not withstand constitutional scrutiny

Source: thompsontax.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---