Judge Modifies Dismissal of Md. Digital Ad Tax Challenge

A district court judge ordered an amendment Tuesday to the court’s Dec. 12, 2022, final judgment dismissing a challenge to Maryland’s digital ad tax law. In February, the 4th U.S. Circuit Court of Appeals remanded the case to the U.S. District Court in Baltimore. The appeals court agreed that the Tax Injunction Act (TIA) prevents federal courts from reviewing the tax but disagreed with the lower court dismissing “with prejudice” (see 2401100060). “Because the TIA bar constituted a jurisdictional defect, the dismissal should have been ‘without prejudice’ so that the Plaintiffs could challenge the tax in the appropriate forum (the state’s administrative agencies and courts),” the appeals court said. However, District Court Judge Lydia Griggsby’s Tuesday order didn’t address the 4th Circuit disagreeing that a decision on the constitutionality of a related pass-through ban was moot.