Washington – The U.S. Court of Appeals for the Fourth Circuit has held that the First Amendment challenge to Maryland’s Digital Advertising Gross Revenues Tax Act, led by groups including the Computer & Communications Industry Association, may proceed to final decision. Calling the law an attempt to “duck criticism by silencing those affected by its tax,” the court of appeals held that the “tax is unconstitutional in all of its applications.”
This Maryland law imposes a substantial tax, up to 10 percent of global revenue, on the nation’s most popular digital services. It then prevents any of these companies from displaying the tax on any bill or invoice, nor may they state what effect the tax has on the price of their goods and services. It is this “pass-through prohibition” that CCIA and its co-Plaintiffs have challenged in federal court as a violation of the right to free speech.
The following can be attributed to Stephanie Joyce, CCIA Senior Vice President and Director of the CCIA Litigation Center for the Connected Economy:
“We are pleased that the Court of Appeals recognized that this Maryland law strikes at the heart of free speech. States cannot use their taxation authority as a lever to squelch discourse and dissent. We look forward to obtaining a final judgment striking this law for once and all.”
