Maryland may not prevent businesses from listing the state’s digital advertising tax on receipts, according to an important decision today by the U.S. Court of Appeals for the Fourth Circuit. The ruling is another legal blow to Maryland’s controversial tax, which faces additional pending legal challenges.
NTUF submitted the only amicus curiae (“friend of the court”) brief in the case, where we explained that the law is effectively a gag order in violation of the First Amendment. Basically, the law tries to lay customers’ blame on higher prices on companies rather than letting customers know that Maryland created a new tax.
Circuit Judge Richardson, writing for the unanimous court, agreed. From the Founding to today, he wrote, “complaining about taxes remains a grand American political tradition . . . Maryland has no reason, other than insulating themselves from criticism and political accountability, to forbid them to explain the tax to their customers.”
The Court held the tax speech ban violated the First Amendment. Typically, any ban on political speech triggers strict scrutiny—judicial review so high that the government rarely wins. Maryland argued this was mere “commercial speech,” which is subject to intermediate scrutiny. Of course, the speech was about the taxes charged, not the digital services themselves. The Court held it didn’t matter: Maryland’s law was so egregious that it failed intermediate scrutiny. Because the law allowed companies to pass along the tax to consumers, but not say why, the scheme “gave up the game” and was shown to be just to insulate the state from criticism but not about forcing the companies to not pass along the taxes.
While the case could be appealed next to the U.S. Supreme Court, for now, the Fourth Circuit has remanded the case back to the district court to determine the scope of injunctive relief. (Under Trump v. CASA, district courts may no longer offer universal injunctions as a matter of course.) Other separate pending cases continue to challenge the Maryland digital advertising tax on Commerce Clause and Internet Tax Freedom Act grounds.
The case is Chamber of Commerce of the United States, et al. v. Lierman, No. 24-1727 (4th Cir. Aug. 15, 2025)