Connecticut legislative leaders recently announced support for a digital advertising tax (âConnecticut Digital Advertising Taxâ) proposed by the Connecticut Joint Committee on Finance, Revenue and Bonding (the âFinance Committeeâ). Connecticut joins Maryland, Massachusetts, New York, and Texas, among others, as states with concrete digital advertising tax proposals on the table (and in Marylandâs case, an enacted law).
State legislators in the Massachusetts House of Representatives recently introduced four bills on the taxation of digital advertising services. Two of these bills propose a tax on digital advertising services, a third bill would set up a âspecial commissionâ to study how to generate revenue from digital advertising, and a fourth bill appears to be a placeholder for some action on digital advertising taxation. This makes Massachusetts one of the latest states to join the wave of state digital advertising tax proposals targeting large digital advertising service providers. We have previously covered Marylandâs digital advertising tax, the first in the nation to become law, and various other statesâ pending digital and data tax proposals, including New York and Texas. Below, we summarize and compare the various Massachusetts proposals.
Texas has now joined the growing number of states proposing digital advertising taxes that we have covered previously on SALT Savvy, including Marylandâs first-in-the-nation digital advertising tax law and other proposals from Connecticut, New York, and Montana. This new Texas billâH.B. 4467â would take effect in 2022. The Texas proposal is very similar to the recently-enacted Maryland digital ad tax (H.B. 732) and would impose a new âdigital advertising taxâ on annual gross revenues derived…
As part of the growing trend of states seeking to tax digital activities and data, New York is considering yet another data tax proposal that would tax the collection of personal data for commercial purposes. This latest proposalâwhich is contained in Senate Bill 4959âwould impose a new excise tax âon the collection of consumer data of individual New York consumers by commercial data collectors.â  The tax would apply regardless of how the data is collected, whether by electronic or other means. Under the proposal, âconsumer dataâ is âany information that identifies, relates to, describes, is capable of being associated with, or could reasonably be linked with a consumer, whether directly submitted to the commercial data collector by the consumer or derived from other sources,â and a âconsumerâ includes individuals who purchase goods or services from a commercial data collector and individuals who use the services of a commercial data collector, whether charged for those services or not. A âcommercial data collectorâ is a âfor-profit entity that: (i) collects, maintains, uses, processes, sells or shares consumer data in support of its business activities; and (ii) collects consumer data, other than consumer contact information, on more than one million individual New York consumers in a month within the calendar year.â  The bill would add the tax to a new section 186-h, within Article 9 of the New York Tax Law.