Maryland’s digital advertising tax is facing constitutional hurdles and a great deal of opposition from multinational enterprises. Depending on the outcome of this dispute, many other states could introduce a similar tax. Tax professionals, including Michael Bernard from Vertex have weighed in.
Tax professionals suggest that multinational enterprises (MNEs) should try to prepare for the possible outcome of the Maryland case and the effect it will have on other state taxes. However, they did indicate that there is a limit to what tax directors can do until there is more clarity on the direction of the court case.
One thing that U.S. MNEs can do is view the Maryland digital advertising tax as a strategic problem. Digital taxes are here to stay, and the deficit caused by the pandemic will increase the pressure at the state and federal levels to bring in more revenue.