Maryland’s new senate president and his predecessor have joined forces on a bill that would tax money made from digital advertising in the state. The money made from the new tax would go toward education funding.
State Senate President Bill Ferguson, D-Baltimore, and Senate President Emeritus Mike Miller are behind Senate Bill 2 which is aimed at companies that target ads towards people in the state of Maryland.
If it becomes law, companies that make more than $100 million globally in advertising and offer digital advertising services in the state would be required to pay the tax on the money made in Maryland.
Companies that make from $100 million to $1 billion would pay 2.5% in taxes, which is the lowest of the rates. Companies such as the social media giants that make more than $15 billion in digital advertising dollars around the globe in a year, would pay the highest rate of 10%.
Money made each year in Maryland from banner ads, advertising on websites and search engine advertisements would count towards the taxable earnings for companies.
Companies would be responsible for reporting earnings from digital advertising to the state.
Funding for education reforms, recommended by the Kirwin Commission, has been a source of debate in the state. The money raised by the aforementioned taxes could presumably be used to fund the measure.
The bill was introduced on Wednesday and is currently in the Budget and Taxation committee.
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