The Stamp Act Attempts a Comeback in Maryland

“That enormous Engine, fabricated by the British Parliament, for battering down all the Rights and Liberties of America.”
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- John Adams on the Stamp Act, 1765

Maryland enacted in 2021 a commercial tax on revenues generated from digital advertising. Affected businesses immediately promised to designate this tax as a line-item on their customers’ bills. Maryland responded by amending the law to gag internet companies to prevent such declarations.

Multiple trade associations sued on First Amendment grounds, but those concerns were dismissed by a district court for lack of jurisdiction. In a reversal, the Court of Appeals for the Fourth Circuit unanimously waved a page from the American Revolution at the state’s lawyers and said: “Not so fast. Ever heard of the Stamp Act?”

A tax is one thing, but restricting how businesses communicate that tax to customers is something else entirely. The right to complain about taxes goes back to the Stamp Act, reasoned the Appeals Court, and it “remains a grand American political tradition.”

The court went straight to the heart of why the First Amendment applies: “As much today as 250 years ago, criticizing the government – for taxes or anything else – is important discourse in a democratic society.”

As it was, the law’s speech provision had the effect of making companies seem responsible for the price increase rather than the state government. This struck the court as inherently unfair: “The pass-through prevents companies from describing the tax in the one setting where the consumer is guaranteed to look: the invoice," the court’s opinion read. “Keeping out of hot water with voters is not among the interests that can justify a speech ban.”

For now, the tax itself remains in place. But now unshackled from legislative sleight of hand, we expect many companies will be updating their customer billing statements in the months ahead.

Perhaps they will include this Annapolis number: 410-841-3000,  labeled: “Maryland General Assembly Switchboard.” Now that would be a major exercise of free speech.

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