Ian Patrick, FISM News
After a veto in May of last year, the Maryland General Assembly may be considering the implementation of a state tax bill for big tech companies in 2021. The Assembly is set to convene on January 13 and is considering the bill once again.
The legislation, put forward by State Senate President Bill Ferguson (D), aims to tax tech companies who make over $100 million in global annual revenue and over $1 million in gross annual revenue derived specifically from digital advertising within the sate of Maryland. The tax rate percentage is set between 2.5 and 10.
Ferguson also claims that this legislation, if passed, could be fruitful for the state by way of funding. In a radio interview he said the bill could help pay for the state’s pandemic-related financial troubles and “civic infrastructure.”
“I think if we need to recover, and everybody deserves a fair shot in this state, that everyone should be participating in the building of civic infrastructure, and Big Tech and Big Tobacco should be participating too.”
The legislation also aims to increase the state’s cigarette tax by $1.75 per pack.
As previously mentioned, the bill was shot down in May of 2020 by Maryland’s Republican Governor Larry Hogan. Business coalitions, tax reform groups, and Maryland Republicans alike are against the bill, generally stating the negative impact the tax could have on small businesses that have relied on digital advertising throughout the pandemic.
Business issues aside, the legislation could pose legal issues as well since it primarily targets companies such as Apple and Google whose headquarters are not based in Maryland. In an interview with National Review, Margaret Mire of Americans for Tax Reform stated that the bill “would tax online advertising” while not taxing “traditional advertising.” She claims the proposed tax possibly violates the Internet Tax Freedom Act, which prohibits “discriminatory taxes” on e-commerce.