Maryland Tax Court strikes down state digital advertising tax and orders refunds to Apple, Google and Peacock TV

A Maryland Tax Court has thrown out the state’s “digital advertising” tax, a charge the state had promoted as the first of its kind in the United States. In its ruling, the court ordered Maryland officials to refund taxes already collected from companies identified in the case, including Apple, Google and Peacock TV.

The decision centers on Maryland’s authority to assess and collect the tax from digital ad activity, and it concludes that the tax orders at issue cannot stand. The court’s action is not framed as a partial win for the state, but as a wholesale invalidation of the orders tied to the tax.

The ruling is significant for large ad-driven platforms because Maryland’s tax plan targeted how advertising is bought, sold and measured online, rather than traditional in-person media. For Apple and Google, the case highlights how state efforts to capture value from digital advertising can quickly collide with tax and administrative authority questions.

For Apple specifically, the company faces scrutiny less often in court over how states tax advertising activity and more often over how states tax services and devices. This matter, as reported, places Apple directly among the companies that were required to pay the digital ad tax before the court later voided the underlying orders and directed refunds.

Google and Peacock TV were also named among the companies receiving refunds. That matters because it suggests the tax was applied broadly across the digital advertising ecosystem, spanning search and advertising platforms as well as streaming-related advertising distribution.

Maryland’s move to create a digital ad tax reflected an increasingly common policy push by states seeking new revenue from technology platforms whose economic activity is often national or global in nature. If other states attempt similar approaches, the Maryland ruling could influence how courts evaluate the legal basis and implementation of such taxes.

What remains unclear is the specific legal reasoning in the Tax Court decision beyond the outcome that the tax orders were voided and refunds were ordered. The report does not disclose, at least in the available account, which statutes or procedural steps the court found deficient, nor does it provide dollar amounts, timelines, or details on how refunds will be calculated.

Looking ahead, Maryland officials will likely need to determine the mechanics of compliance, including how they will process refunds and whether they intend to seek further review. Companies named in the refunds may also seek clarification on how the ruling affects any future tax assessments tied to digital advertising.