Maryland Digital Tax Suit Belongs in State Court, Judge Says (2)

Maryland’s first-of-its-kind state levy on digital advertising is a tax that must be challenged in state court, a federal trial court ruled.

The federal Tax Injunction Act bars U.S. district courts from hearing state tax disputes before the issues pass first through state courts. Because the Digital Ad Tax Act charge is a tax, four trade associations challenging it must make their statutory and constitutional arguments in state court first, Judge Lydia Kay Griggsby of the U.S. District Court for the District of Maryland ruled Friday.

Richard Pomp, a professor of tax policy at the University of Connecticut ...