Proposed digital advertising tax regulations were filed on August 31 by Maryland’s comptroller. In simple terms, the proposed regulations would require companies that derive revenue from residents of Maryland as a direct result of those residents responding to digital ads running in Maryland to report the revenue derived from such ads, which would then be subject to a tax rate unique to each advertiser.
The regulations propose, for example, that revenue that is attributable to a company through advertising run in Maryland would be subject to a tax based on a ratio of the number of devices that have interacted with a digital ad placed by the company within the state of Maryland (as measured by IP address, geolocation data, device registration, or cookies) divided by the number of devices located elsewhere that have accessed the same digital ad. The resulting factor, which presumably would vary from advertiser to advertiser, would then be used to calculate digital advertising tax owed to the state of Maryland. As proposed, companies subject to the tax would themselves be held responsible for recording and reporting any data needed to file any formal statements or returns with the state.
The proposed regulations have been made available at https://us.eversheds-sutherland.com/portalresource/proposedregulations.pdf. A public comment period will end November 8.
AAF Nebraska’s Legislative Affairs Committee continues to monitor Nebraska’s state legislature for any signs that a similar bill may be proposed here. Advice or suggestions for the committee may be directed to Jeffrey Maciejewski at jeffm@creighton.edu or Cassi Warren at cewarren@hearst.com.
