The following is a statement by Krisztina Pusok, Directory of Policy and Research at ACI, regarding Maryland’s Digital Ad Tax:

ACI strongly urges Maryland’s legislature not to overturn Governor Hogan’s veto of HB732 (Tobacco Tax, Sales and Use Tax, and Digital Advertising Gross Revenues Tax). The proposed digital ad tax, while vaguely worded, would have concerning repercussions for small businesses, entrepreneurs, and Marylanders. 

As highlighted by empirical evidence, the digital ad tax and resulting costs will not be borne by large tech companies, but instead it will be passed on to the businesses that utilize digital marketplaces and consumers who will be paying more for products and services.

Business activity is already taxed by states, and justifications for a standalone digital ad tax are negligible especially during these times of economic hardship. It is estimated that 30,000 of small businesses will close permanently by the end of the year in Maryland alone as a consequence of COVID-19. With more businesses marketing online especially during the pandemic, imposing an additional burdensome tax at a time where many small businesses are already financially vulnerable would be harmful to businesses and consumers alike.

At a time of high economic uncertainty, members of Maryland’s General Assembly should prioritize helping small businesses and entrepreneurs staying afloat, NOT raising taxes and fees on Marylanders and creating new obstacles to their financial survival.