Maryland Digital Ad Dispute Sets Up Fees vs. Taxes Debate

A federal judge presiding over the tech industry’s legal clash with Maryland over digital advertising is asking attorneys to delve into the distinction between taxes and fees.

U.S. District Court Judge Lydia Kay Griggsby—who took over the case last week after a previous judge withdrew over potential conflict of interest—ordered Maryland Comptroller Peter Franchot to file a brief on whether the state’s Digital Advertising Gross Revenues Act constitutes a “tax” or a “penalty,” and whether the state established a timely remedy for legal challenges under the federal Tax Injunction Act.

The difference between fees and taxes ...