Here’s the latest AAF Government Report
Maryland Accepts/Rejects Ad Tax Bills
Before adjourning the legislative session due to the COVID-19 pandemic, the Maryland General Assembly approved a bill including the digital ad tax and has sent the measure to Governor Larry Hogan (R). The Governor has not commented specifically on the proposal, but has been vocal in his opposition to new taxes and is expected to veto the measure.
The Governor has until May 6, to veto or sign the bill into law. The General Assembly hopes to be able to return to session in late May to consider veto overrides and other business. All plans are currently tentative and subject to change based on current events.
AAF Baltimore President, Matt McDermott and AAF National EVP of Government Affairs, Clark Rector each testified against the tax before the legislative tax writing committees. AAF has asked the Governor to veto the measure and encouraged the members of our two Maryland advertising federations to do so as well. Should the bill ultimately be enacted into law, it is likely to face numerous legal challenges due to its violation of the Permanent Internet Tax Freedom Act and other constitutional challenges.
In better Maryland news, the introduced bill to reduce the sales tax rate but expand the tax to include many services, including advertising, was decisively rejected in a lop-sided bipartisan vote. AAF Baltimore VP, Ashlene Larson and AAF National EVP of Government Affairs, Clark Rector, both attended the Ways and Means Committee hearing to express opposition.
New York Targets Digital Ads
New York State Senator and Deputy Majority Leader Michael Gianaris has introduced a bill virtually identical to the Maryland proposal which would place a gross receipts tax on the digital advertising revenues of companies with global annual gross revenues exceeding $100 million. Immediate action is uncertain, but the AAF has weighed in with lawmakers against the proposal and will work with our local members and other allies to actively oppose the measure.
Privacy in the States
In Washington, the legislature adjourned without a final agreement on SB 6281 which dealt with the management and oversight of personal data. While AAF supports the state’s interest in protecting the privacy of its citizens, we believe a number of provisions in the bill would have undermined privacy protections for Washington residents and created undue burdens for businesses.
AAF and our allies continue to communicate with the California Attorney General urging him to delay enforcement of the California Consumer Privacy Act. Given current events, and the fact that implementing regulations have still not been finalized, we believe it will be inherently more difficult for businesses to meet the current July 1, 2020 deadline.