Maryland is currently facing a federal lawsuit over the legality of its digital advertising tax. The state is considered one of the first to introduce this new tax, which only became law after the legislature overturned the governor's inital veto. While still considered relatively new, Maryland's digital ad tax model is fundamentally complex, confusing, and challenging to navigate. Other states across the nation are looking to Maryland's statute to help implement and adjust their own digital tax options and to ensure they are avoiding similar pitfalls.
Digital taxes will be added to the cost of doing business moving forward, but that doesn't have to be painful for organizations. Businesses should now anticipate "when" and "how" digital taxes will become a reality in every state–not "if" it will be done. While there are no immediate answers, past actions, including the rollout and implementation of Wayfair-related tax rules and other European digital tax models, could be the answer for businesses moving forward. After all, states will need to create taxes that address new consumer and technology change and strike the right balance to ensure all states have healthy economic futures.