April 19, 2021

Volume XI, Number 109

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Maryland Digital Advertising Services Tax—Implementation Delay Likely

On the morning of Friday, February 26, 2021, the Maryland Senate Budget and Taxation Committee added a new item to its agenda for the hearing later that morning. The new item was proposed amendments to Senate Bill 787, a bill that would amend the Maryland Digital Advertising Tax by excluding broadcasters and news media and preventing service providers from directly passing the tax through to customers. One of the amendments would change the tax years to which the tax applies from tax years beginning after December 31, 2020, to tax years beginning after December 31, 2021. The amendment passed on a voice vote.

The amendment was sponsored by the bill’s author, Senate President Bill Ferguson. Senator Ferguson was also the chief proponent of the Digital Advertising Services Tax. A companion bill, House Bill 1200, sponsored by House Majority Leader Eric Luedtke, came up for a hearing in the House Ways and Means Committee later that day, but only testimony from supporters of the two carve-outs was received. No amendments were offered, and no votes were taken.

Because the amendment delaying the implementation of the Digital Advertising Services Tax is coming from the Senate’s president, we believe its passage a near certainty. This amendment, if passed, would not delay the effective date of the tax, it would only change the tax year to which it first applies from 2021 to 2022.

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© 2021 McDermott Will & EmeryNational Law Review, Volume XI, Number 61
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Michael B Kimberly Litigation Lawyer MWE Law Firm
Partner

Michael B. Kimberly is co-chair of the Firm’s Supreme Court and Appellate Practice Group. He handles complex appeals and trial court motions with a primary focus on antitrust law, administrative law and constitutional law. An accomplished appellate lawyer, Michael has argued appeals in courts throughout the country, including five times in the US Supreme Court, three times before the en banc courts of appeals, and a dozen other times in the federal courts of appeals and state appellate courts. He has briefed more than 200 appellate matters, including 23 Supreme...

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Stephen P. Kranz Lawyer McDermott Will
Partner

Stephen P. Kranz is a partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Washington, D.C., office.  He engages in all forms of taxpayer advocacy, including audit defense and litigation, legislative monitoring, and the formation and leadership of taxpayer coalitions.  Steve is at the forefront of state and local tax issues, including developments arising in the world of cloud computing and digital goods and services.  He assists clients in understanding planning opportunities and compliance obligations for all states and all tax types. ...

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Mark Nebergall, McDermott Law Firm, Washington DC, Tax Law Attorney
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Mark Nebergall advises clients on all aspects of tax policy with respect to software transactions at state, federal and international levels. He also works with McDermott’s tax controversy team handling tax litigation where he brings his former experience as a litigator for the US Department of Justice, Tax Division. Mark combines tax policy and tax litigation skills to help solve client tax problems holistically.

Mark has served as President of the Software Finance and Tax Executives Council, a trade association providing software industry...

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