Maryland approves the first state tax on digital ads from Facebook and Google

Maryland has passed the country’s first tax on digital ad revenue from companies like Facebook, Google, and Amazon.

The Senate voted Friday to lift the governor’s veto on the measure after a similar vote by the House of Representatives, the New York Times reported. The measure is expected to produce up to $ 250 million in its first year.

There are apparently legal risks associated with the move, which risks posing tough challenges to courts over the extent to which governments can tax social media and tech giants. Opponents and analysts have warned that the bill could violate First Amendment and federal regulations that could prevent discriminatory taxes for Internet companies, the Washington Post reported in January.

The Maryland tax specifically applies to digital advertising displayed in the state. It is also billed based on ad sales generated by a company. Companies that earn $ 100 million to $ 1 billion annually are taxed at 2.5%. Companies earning more than $ 15 billion, including Facebook and Google, should pay 10% tax on digital ad revenue.

In addition to Silicon Valley lobbyists, Republicans in Maryland, local media, and telecommunications companies are also opposed to the project. For those who don’t say, the bill could be transferred to small businesses that buy ads.

But state governments, which have suffered from the pandemic, see these projects as a way to fill their coffers. Connecticut and Indiana lawmakers have already introduced similar measures for social media tax giants.

Tax law is only part of a growing debate over the dominance and power of tech giants. In the United States, companies like Facebook and Google face various antitrust laws. Federal antitrust laws can target these companies, as well as Apple.

The measures in the United States are also following in the footsteps of European governments, which have imposed new restrictions and new taxes on American giants and other technologies.

While Apple’s laws and regulations can extend and influence Apple, tech giant Cupertino isn’t counting on advertising revenue. Instead, most of the money you make comes from selling hardware and services.

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