The state of Maryland is reportedly set to be the first U.S. state that will impose a tax on the sale of online ads. The tax will impact the Masters of the Universe, primarily Google and Facebook which hold the ad market in a duopoly that Amazon is only beginning to gain a foothold in, but critics claim the tax will be passed on, saying “This tax increase was historically shortsighted, foolish, and harmful to countless small businesses and employees, and Marylanders will remember it that way.”
NPR reports that the Maryland House of Delegates and Senate both voted this week to override the veto by Gov. Larry Hogan (R) of a bill passed last year to tax online advertisements. The tax will be applied to the revenue that companies such as Facebook and Google generate from selling digital ads.
The tax will reportedly range from 2.5 percent to 10 percent per ad, depending on the value of the company selling the ad. The tax will only apply to companies making over $100 million a year.
Supporters of the new tax claim that it is a reflection of where the economy has shifted to, and an attempt to have Maryland’s tax code catch up to current business practices. The tax is expected to draw an estimated $250 million a year to help fund a decade-long overhaul of the Maryland public education system.
The overhaul is expected to cost $4 billion a year in new spending by 2030. Gov. Hogan vetoed the ad tax initially claiming that it would raise operating costs for local businesses as companies like Google and Facebook would pass the costs along to them.
In a statement on Friday, Marylanders for Tax Fairness, a group of businesses formed to fight the tax, criticized the General Assembly’s override of Hogan’s veto.
Group spokesman Doug Mayer, who once worked as an advisor to Hogan, commented:
In Senate President Bill Ferguson’s short tenure as a leader, he has managed to do what no other Senate President has ever done — raise taxes and costs on Marylanders in the middle of a worldwide pandemic.
There is no doubt what took place today was a historic event, but not in the way President Ferguson hoped. This tax increase was historically shortsighted, foolish, and harmful to countless small businesses and employees, and Marylanders will remember it that way.
In reaction to these worries, Ferguson introduced emergency legislation last week that would prohibit tech firms from passing along the tax costs to local businesses. It would also exempt media companies from paying the tax.
Read more at NPR here.
Lucas Nolan is a reporter for Breitbart News covering issues of free speech and online censorship. Follow him on Twitter @LucasNolan or contact via secure email at the address firstname.lastname@example.org