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US State Maryland Considering Digital Advertising Tax

by Mike Godfrey, Tax-News.com Washington

27 January 2020


On January 8, 2020, a bill was introduced in the Senate of the US state of Maryland that would impose a tax on revenues associated with digital advertising derived in the state.

Under the bill – the first of its kind to be introduced into a US state legislature – digital advertising would be considered to be received in the state if such was received on a device with an IP belonging to Maryland or if it is known or reasonably suspected that the device was used in the state.

Advertising providers would be subject to progressive tax rates as follows:

  • gross revenues of USD100m to USD1bn – 2.5 percent;
  • USD1bn to USD5bn – five percent;
  • USD5bn to USD15bn – 7.5 percent; and
  • In excess of USD15bn – 10 percent.

Taxpayers who derive at least USD1m from digital advertising services in the state in a calendar year would be required to file a tax return with the Comptroller on or before April 15 of the following year.

Additionally, taxpayers who reasonably expect their gross revenues from digital advertising services in the state to exceed USD1m must file a declaration of estimated tax on or before April 15 of that year as well as file estimated tax returns on a quarterly basis.

According to the bill, the tax would be applicable from taxable years beginning after December 31, 2020.

TAGS: tax | commerce | internet | e-commerce | transfer pricing | tax rates | United States | services | Tax | BEPS

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