RICHMOND, Va.—Today, the U.S. Court of Appeals for the Fourth Circuit rightly concluded that the censorship provision in Maryland’s digital advertising tax law was unconstitutional in NetChoice’s case with the Chamber of Commerce and Computer & Communications Industry Association (CCIA).
At the heart of Chamber of Commerce, NetChoice & CCIA v. Lieberman is a provision tucked into Maryland’s digital advertising tax law, passed in 2021, that prohibited online services from being able to communicate with their customers about why they were adding the tax to digital purchases—because the State was mandating it. This is clear unconstitutional censorship, and the Fourth Circuit recognized that.
“The government has no power to silence dissent in America. Maryland tried to prevent criticism of its tax scheme, and the Fourth Circuit recognized that tactic for what it was: censorship,” said Paul Taske, Co-Director of the NetChoice Litigation Center. “When states enact new policies, they should expect a variety of opinions, and the First Amendment prohibits the government from insulating itself against criticism. That does not change when the criticism happens online. The Fourth Circuit was absolutely correct.”
The Court begins its opinion with an important history reminder for Maryland: the American colonies rebelled against the British parliament’s Stamp Act in 1765 for many reasons, including a key provision of the tax that “jeopardized” the peoples’ ability to speak out about the taxes. As the opinion notes, “complaining about taxes remains a grand American political tradition.” The Court goes on:
Perhaps fearing such complaints, Maryland paired its tax with another rule. Companies that make money advertising on the internet must not only pay the tax but avoid telling their customers how it affects pricing: No line items, no surcharges, no fees. If companies pass on the cost of the tax, they must do so in silence—keeping customers in the dark about why prices have gone up and thereby insulating Maryland from political responsibility.
We’re thrilled to see the Fourth Circuit recognize the historical parallels in our case and that it stopped Maryland from censoring American businesses from talking about taxes that affect them and their customers.
NetChoice is proud to work every day to defend the core American values of free expression and free enterprise from government overreach.
Read the Fourth Circuit’s opinion here.
Please contact press@netchoice.org with inquiries.