MARYLAND (WBFF) — A recent Maryland Tax Court ruling struck down Maryland’s first-in-the-nation digital advertising tax, eliminating a source of revenue intended to help pay for the state’s sweeping K-12 education reforms.
But the ruling, which found the state’s 2021 Digital Advertising Gross Revenues Tax violated federal law by taxing digital advertising while exempting comparable nondigital advertising, does not appear to leave an immediate $536 million hole in Maryland’s budget. The state has been unable to spend the tax revenue it collected since 2022 while legal challenges played out.
This leaves a complicated question for a state already projected to face budget shortfalls through 2031: How much will losing the tax matter to Maryland’s finances going forward?
Economists interviewed by The Baltimore Sun Monday differed over the answer. Some said the loss of a future revenue source could increase pressure to raise taxes, cut spending or borrow more. Others said the revenue is relatively small compared with Maryland’s $70.8 billion operating budget and may require little fiscal adjustment.
Read the full story on The Baltimore Sun.
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