MARYLAND SUPREME COURT REVERSES RULING ON DIGITAL AD TAX

Maryland's highest court on Tuesday reversed a ruling by a lower court that the state's first-in-the-nation tax on digital advertising was unconstitutional, saying the court lacked jurisdiction over the case

In an order, Justice Matthew Fader, the chief justice of the Supreme Court of Maryland, sent the case back to Anne Arundel County Circuit Court with directions to dismiss. He said the plaintiffs failed to exhaust administrative remedies through the state's tax court Reasons will be stated in a later opinion. The four-page order does not make any ruling on the constitutionality of the law.

Last year, the circuit court ruled that the tax on digital advertising violates the federal Internet Tax Freedom Act, which prohibits discrimination against electronic commerce.

The court also held that the law violates the U.S. Constitution's prohibition on state interference with interstate commerce.

In a case that is being closely watched by other states that have also weighed a similar tax for online ads, Maryland's comptroller appealed the decision in the case brought by Verizon Media Inc. and Comcast.