Maryland Tax Court Strikes Down Digital Advertising Tax, Orders Refunds
On August 14, 2026, the Maryland Tax Court issued landmark decisions in three cases: Apple Inc. v. Comptroller, Google LLC v. Comptroller, and Peacock TV, LLC v. Comptroller. The court granted summary judgment to the taxpayers, declaring Maryland’s Digital Advertising Gross Revenues Tax unconstitutional and ordering the state to issue full tax refunds with interest. The court found that the statute violated the federal Internet Tax Freedom Act (ITFA) by discriminating against electronic commerce, as it deemed digital and traditional offline advertising legally similar and thus unable to be taxed dissimilarly. Additionally, the court ruled that calculating tax rates based on worldwide gross revenue, rather than in-state activity, violated both the dormant Commerce Clause and the Due Process Clause by unconstitutionally taxing out-of-state economic activity. In the Peacock TV case, the Tax Court also ruled that the statutory exemption for broadcast news media violated the First Amendment of the U.S. Constitu...
