Taxes on digital ads, cigarettes among House veto overrides



COLLEGE PARK, Md. (Feb. 11, 2021)—A digital advertising tax that would pay for Maryland's sweeping education reform was among Gov. Larry Hogan's, R, vetoes that the state's Democratic House of Delegates overrode Thursday.

The state predicts revenue as high as $250 million in the first year after implementation of the digital advertising tax, which would be the first of its kind in the U.S., from national or international companies or state taxpayers expecting to report significant revenue from digital advertising, according to legislative analysis.

The vetoed bill, HB0732, which the House overrode, would also raise taxes on e-cigarettes and tobacco products, including bumping tax on cigarettes from $2.00 to $3.75 per pack.

Discouraging individuals, particularly children, from purchasing tobacco products was a primary goal of the bill, Del. Eric Luedtke, D–Montgomery, who lost both his mother and grandmother to smoking-related illnesses, and who expects his 20 years of smoking will have a toll on his own health, said during Thursday's floor session.

Republican delegates, including Del. Jason Buckel, R–Allegany, who lost his grandparents to smoking-related illnesses 45 minutes apart, argued that the bill would do little to prevent smoking.

Del. Mike Griffith, R–Cecil and Harford, said tech giants would find ways sidestep the digital advertising tax, which would instead hurt small businesses already reeling from the pandemic.

"For small businesses fighting to survive during COVID-19, this vote sends a chilling message about the priorities of those in power," Marylanders for Tax Fairness spokesman Doug Mayer said in a press release sent to Capital News Service.

Revenue from the digital advertising tax will at least partially fund the Blueprint for Maryland's Future, the state's multi-billion dollar education reform initiative, while the tobacco tax would go toward Maryland's rainy day fund and other COVID-related costs.

The House also enacted a vetoed bill requiring that a licensed firearms dealer facilitate most transactions involving rifles and shotguns.

The bill, which the Senate overrode Tuesday (cnsmaryland.org/2021/02/09/long-gun-restrictions-among-four-md-senate-veto-overrides/), mandates that licensed armed dealers mediate the sale, rental or transfer of the weapons as if selling from their own shop, including conducting background checks, following state and federal laws and charging a fee.

Republican delegates were furious about what they perceived as the divisiveness of a bill infringing upon their constituents' gun rights, though bill sponsor Del. Vanessa Atterbeary, D-Howard, said during Thursday's floor session that the legislation would exempt temporary sharing –– common among sports shooters and hunters –– and allow immediate family members, including those outside the household, to transfer guns among each other.

The House is scheduled to meet again Friday and is expected to advance a $1 billion COVID financial aid bill—known as the RELIEF Act, initiated by Hogan—that would include direct stimulus payments, tax breaks, aid for businesses and other measures to help Marylanders weather the pandemic.

The House is also expected to override on Friday Hogan's veto of a bill that would grant the state's historically Black colleges and universities with $577 million through 2031 –– the result of findings (www.baltimoresun.com/politics/bs-md-pol-hbcu-lawsuit-20210119-hkwjten5pzdybcem7pj5r5ppji-story.html) that the state for years inequitably funded and undermined enrollment at its four HBCUs in favor of predominantly white institutions. The bill would also create a reserve for unused funds.

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