Fourth Circuit Court of Appeals holds Maryland’s “unusual” digital ad tax’s pass

On August 15, 2025, the United States Court of Appeals for the Fourth Circuit held that a Maryland statutory provision prohibiting sellers from itemizing the digital advertising tax (DAT) on their invoices violates the First Amendment. As readers are likely aware, the DAT is imposed on gross revenues from digital advertising services in Maryland. After originally enacting the tax over the governor’s veto in 2021, the legislature subsequently passed a provision that prohibited sellers from “directly pass[ing] on the cost of the tax … to a customer who purchases the digital advertising services by means of a separate fee, surcharge, or line-item.” The U.S. Chamber of Commerce and trade associations sued in federal court, arguing that the provision is a content-based restriction on speech tha