Big Tech companies affected by Maryland’s newly introduced legislation to tax the bejesus out of their digital ad revenue have filed a lawsuit against the state to stop the law from being implemented.
As reported on Rebel News, the Maryland House of Delegates and State Senate voted to override a veto by Gov. Larry Hogan in order to pass a bill taxing online ads hosted by companies earning more than $100 million a year. The tax is primarily aimed at Facebook and Google, which own a duopoly in the space, alongside Amazon, which just got into the game.
On Thursday, the U.S. Chamber of Commerce and an industry lobbyist group supported by Amazon, Facebook and Google announced their lawsuit against the state.
The legal complaint by the groups, which includes the lobbyist group Internet Association, was filed in a federal district court in Maryland after the state passed the nation’s first-ever tax on online advertisements.
The Washington Post reported:
The legal challenge contends that Maryland’s first-in-the-nation tax is unfair, unconstitutional and incompatible with federal laws that prohibit state policymakers from instituting levies specifically targeting online services.
If unchallenged, the would will have dire ramifications for Big Tech, as other states may join suit by imposing independent legislation to tax the companies’ advertising businesses, and effectively hit Big Tech where it hurts — their wallets.
“In light of the current pandemic and economic uncertainty, increasing taxes on services used by small businesses to keep themselves running is a particularly poor and ill-timed policy,” the Chamber’s chief tax policy counsel, Caroline Harris, said in a statement.
It’s worth noting that as part of Maryland’s efforts to tax Big Tech, the state issued legislation prohibiting the companies from passing on the costs to businesses and individuals in the state who use their advertising services.
“For two decades, these companies have grown exponentially by availing themselves of the privileges of states, benefited from the aggressive uncompensated collection of personal and private information about Maryland’s residents, and been free riders to Maryland’s investments in our civic infrastructure,” said Senate President Bill Ferguson, a Democrat who authored the tax law. “All of this while contributing nothing to the future of Maryland’s residents.”
Facebook, Google and Amazon are facing numerous challenges in the United States from both sides of the political aisle, with politicians beginning to wake up to the threat of digital monopoly.
Numerous states including Florida and Texas have launched lawsuits against Silicon Valley’s tech giants in the wake of out-of-control censorship, including the removal and deplatforming of former president Donald Trump from all mainstream social media networks.
In early February, Florida Gov. Ron DeSantis announced the start of a major effort to address the political bias and censorship of companies like Facebook and Twitter. As reported on Rebel News, DeSantis identified these companies as the primary threat to American democracy and freedom of expression.