Md. Says Ban on Passing Tax Costs to Consumers Doesn't Violate Speech
Dismiss businesses’ remaining claim against Maryland’s digital ad tax, said the state in a Friday brief at the U.S. District Court in Baltimore (case 1:21-cv-00410-DKC). After ruling in March that the Tax Injunction Act precluded the court from reviewing the…
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tax itself, Judge Lydia Griggsby ordered briefs in early April on the constitutionality of Maryland banning companies from passing the tax’s costs to consumers (see 2204090002). The pass-through regulates conduct, not speech, said Maryland: And the prohibition doesn’t “purport to impose any restriction on what the taxpayer may say to the customer, or anyone else, about the tax cost or any other subject.” Plaintiff U.S. Chamber of Commerce said the pass-through regulates speech. “The regulation is plainly content-based, and thus presumptively unconstitutional. It would be permissible only if it were narrowly tailored to further a compelling governmental interest, and the prohibition here does not come close to meeting that rigorous standard.” The ban’s only apparent interest is “to insulate lawmakers from political responsibility for the” tax, the chamber said.