BALTIMORE—Today, the U.S. District Court for the District of Maryland issued a final judgment, ruling the censorship provision of Maryland’s digital advertising tax law was unconstitutional and permanently blocked the state from enforcing it in NetChoice’s lawsuit with the Chamber of Commerce and Computer & Communications Industry Association (CCIA).
At the heart of this case was a provision tucked into Maryland’s 2021 digital advertising tax law, which tried to ban digital services from communicating with their customers about why the price of these services were increasing: because the State imposed a new tax. Maryland’s policymakers didn’t want to face the political heat for raising taxes and prices, but that’s unconstitutional. The U.S. Court of Appeals for the Fourth Circuit found this to be the case in August, and today, the District Court affirmed that and permanently stopped the provision from being enforced.
“Today is a victory for free speech, political discourse and internet freedom. The Fourth Circuit was clear: states cannot shield themselves from criticism by preventing companies from highlighting the consequences of a new policy,” said Paul Taske, Co-Director of the NetChoice Litigation Center.
Taske continued: “Businesses will finally be able to see that Maryland’s policies are directly impacting their bottom line. And Maryland will have to reckon with that. We’re grateful the District Court permanently blocked Maryland’s censorship provision in its digital ads tax scheme.”
We are also grateful Maryland Attorney General Anthony Brown agreed to the judgment in light of the Fourth Circuit’s ruling from August. In its opinion, the Circuit Court gave a strong rebuke of Maryland, reminding them of how this rule violated America’s core principles and the history of our nation’s founding.
The Fourth Circuit wrote:
In 1765, the British Parliament imposed a novel tax on the fledgling colonies in North America. The Stamp Act was reviled because it taxed most everything written on paper, from playing cards to newspapers. This not only cost people money but jeopardized their ability to speak on matters of public concern. John Adams roused Massachusetts against the tax, calling it an “enormous Engine . . . for battering down all the Rights and Liberties of America.”…In more ways than one, the Stamp Act and other taxes like it ignited revolution. Two and a half centuries later, the State of Maryland imposed another tax—not on those who print pamphlets but their internet-age successors. This tax applies to the money made by advertising on the internet. But as some things have changed, others have remained the same. It is no less true today than centuries ago that “the power to tax involves the power to destroy.” And complaining about taxes remains a grand American political tradition.
NetChoice is proud to work every day to defend the core American values of free expression and free enterprise from government overreach.
Read the District Court’s final judgment here and the Fourth Circuit’s opinion from August here.