A recent Maryland court ruling striking down the state’s 2021 digital advertising tax is renewing scrutiny of Illinois’ newly enacted digital advertising tax under SB 3019. The decision found Maryland’s ordinance violated federal law and ordered the state to refund taxes collected with interest, raising questions about the legal and economic viability of similar policies in other states.
“A court in Maryland on Friday struck down the state’s 2021 digital advertising tax. As expected, it found that the ordinance violated federal law and ordered the state to pay back the fees it collected with interest. This should be a glaring warning sign to our State lawmakers who passed Illinois’ own version of this legislation this year. Digital ad taxes are bad policy. Whatever revenue needs Illinois has, the answer won’t be found in unconstitutional provisions that unfairly target digital platforms, as confirmed by the court,” said Jack Lavin, President and CEO of the Chicagoland Chamber of Commerce.
“With small and mid-sized businesses across the Chicagoland area set to shoulder the burden of higher digital advertising service costs due to SB 3019, it’s more important than ever for lawmakers to expediently revisit this bill before it takes effect at the beginning of next year and begins impacting Illinois’ job growth and competitiveness.”