A federal appeals court ruled Maryland's tax on digital advertising unconstitutional, citing free speech violations. The law restricted major companies like Meta and Google from disclosing the tax's impact on pricing. Maryland aimed to generate revenue for K-12 education but was accused of avoiding criticism by penalizing transparency. The court emphasized the importance of political accountability and societal discourse, referring to historical taxation issues. The ruling reverses a lower court's decision and instructs considerations for an appropriate remedy, amidst heightened scrutiny from other states contemplating similar taxes.
The unanimous ruling by the 4th U.S. Circuit Court of Appeals found that Maryland's tax on digital advertising violated the Constitution, infringing on free speech rights of companies.
Judge Julius Richardson emphasized that silencing those impacted by a tax prevents political accountability and criticism of government actions, which are essential in a democratic society.
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