The Maryland digital advertising tax has not been well received. That’s putting it mildly. On Thursday, tech-focused lobbying groups filed to sue the state. Check out Scott Nover’s piece for the action. 

To recap: the state is trying to put a tax on the money businesses make for the ads they serve to people who live in Maryland, estimating it will generate a not-insignificant $250 million in its first year.

The intent: recoup some of the money that tech giants have not, historically, paid in tax.

The reality: this will likely fall hardest on the smaller businesses that use tech platforms' services to serve ads. 

“The most likely scenario is that the platforms will pass through the entire tax to its customers (the advertisers), which is not the intention behind the law,” said Ruben Schreurs, group chief product officer at the marketing consultancy Ebiquity.

If we know anything about Big Tech companies—from their nuclear response to government regulation in Australia—it’s that they like to hold on to their high-margin, profit-driving ways of conducting business. Being taxed is not high up on that list. 

This is not the first time legislation has been accused of targeting the symptom and not the cause as it tries to rein in tech companies. But, this comes at a time when states are feeling the pinch from coronavirus, the need to find some way to generate lost revenue adds another layer of urgency. I'm not sure that haste is a good thing. 

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Thanks for reading, have a great week!

Lucinda

Lucinda.Southern@adweek.com

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