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Legislation passed by the Maryland General Assembly on the last day of the regular session (April 12) delays the state’s digital advertising gross revenue tax by one year and retroactively amends the state’s digital products sales tax provisions. Because of questions raised by litigation challenges to the Maryland digital advertising tax under the federal Internet Tax Freedom Act and the US Constitution and the lack of guidance from the Comptroller on how to source digital ad revenue, a delay has been expected.

The measure now goes to Governor Larry Hogan (R) for his consideration. Taxpayers subject to sales or use tax under the digital products provisions that became effective March 14, as well as taxpayers required to pay a digital advertising gross revenue tax estimated payment on April 15, should monitor the Governor’s action on this legislation. The Governor must act on the bill within 30 days of transmittal or it will become law without his signature.