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Letter to Maryland Legislators: Oppose the Digital Advertising Tax

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February 27, 2020

Dear Maryland Legislator, 

On behalf of the undersigned organizations and businesses, representing a diverse coalition of nonprofit organizations and Maryland small businesses, we write to express our serious concerns regarding Senate Bill 2 and House Bill 0695, the “Digital Advertising Gross Revenues-Taxation'' bills. If adopted, this tax would significantly impact digital advertising within the state of Maryland, hurting our ability to sustain and grow our businesses.

Senate Bill 2 and House Bill 0695 would create a new tax on digital advertising revenues of companies with more than $100 million in global revenue. The tax could reach as high as 10 percent of revenues. The bills violate the Permanent Internet Tax Freedom Act and are constitutionally suspect. 

Even if the legal maladies could be solved, this onerous tax should not be adopted. These bills are crafted to tax large companies that host digital advertising, but their impact will not be felt simply by those firms. Instead, Maryland-based small businesses and nonprofit organizations, such as ours, will feel the pinch.

Any tax on digital advertising will be passed on to companies and organizations seeking out Maryland audiences online, like ours. That means higher prices for digital advertising to consumers in our state, leaving us to feel the real pain of the tax.

Digital advertising is essential. It empowers groups and businesses like ours to compete in a difficult marketplace. By advertising our stores, our products, our restaurants, and our missions, we can compete with large, global entities to create jobs for Marylanders and advance our missions improving the Old Line State. 

We understand the importance of funding education in the state of Maryland, but imposing unconstitutional taxes on digital advertising should not be a solution. For the sake of our organizations and small businesses, we hope that you reject this poorly constructed proposal. 

Sincerely, 

National Taxpayers Union

Maryland Chamber of Commerce

127 Creative

360 Your Business

American Advertising Federation of Baltimore

Americans for Tax Reform

Antietam Broadband

Baltimore Business Journal

Bubble Social Media Marketing

Care Net Pregnancy Center of Frederick

Catherine Foundation Pregnancy Resource Center

Commercial Insurance Managers, Inc

Devaney & Associates

Herrmann Advertising

High Rock Studio

Hulu

Landmark Digital

Laura’s Eyes Photos

Manning Media Inc

Millennium Marketing Solutions

New North

Orange Element

Pink Dog Digital

RCI Custom

REJ & Associates, Inc

Saunders Tax and Accounting

SMiles Media

SysTech Networks, LLC

The Alternative Board

Total Tax Service

TSL Karaoke Entertainment