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]]>The final regulations were adopted almost entirely as proposed, with just two minor changes that the Attorney General (AG) of Maryland certified as non-substantive. Specifically, the changes to the October 8 proposed regulations concern the information that may be used to determine the location of a device and are described by the AG as follows:
- Regulation .02(C): The Comptroller is clarifying language regarding the allowable sources of information a taxpayer may use to determine the location of a device. Specifically, this final action amendment changes “both technical information and the terms of the underlying contract” to “both technical information and nontechnical information included in the contract.”
- Regulation .02(C)(2): The Comptroller is amending the non-exhaustive list of technical information to include “industry standard metrics.”
Practice Note: While “industry-standard metrics” is a nice addition to the list of sources that may be used to determine the location of devices for sourcing purposes, significant and fundamental questions and concerns submitted as part of the comments were not addressed by the Comptroller in adopting the final digital ad tax regulations. The tax is subject to multiple lawsuits (both state and federal court) and pending a court order to the contrary is scheduled to take effect beginning January 1, 2022, with the first filing obligation for large taxpayers in April 2022. Taxpayers grappling with how to comply with this new tax are encouraged to contact the authors.
© 2021 McDermott Will & Emery
Article by Stephen P. Kranz, Eric Carstens, and Jonathan C. Hague with McDermott Will & Emery.
For more updates on tax regulations, visit the NLR Tax section.
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A municipal zoning ordinance that restricts the placement of digital billboards does not violate an advertiser’s right to free speech, according to a recent decision by the U.S. District Court for the Western District of Michigan in Hucul Advertising, LLC v. Charter Township of Gaines, No. 1:11-cv-682 (Bell, J.). The lawsuit follows an earlier, unsuccessful lawsuit by Hucul against the Township that was the subject of an earlier blog post.
The case involves the outdoor advertising company’s challenge of a Township ordinance under the First Amendment to the U.S. Constitution. The ordinance requires that billboards be placed next to a local highway and that digital billboards be placed more than 4,000 feet apart from one another. Hucul filed the lawsuit after the Township denied the company’s application to erect digital billboards that did not conform with the ordinance.
In granting summary judgment for the Township, the Court explained that a municipality may place valid limits on the “time, place, and manner” of speech provided:
(1) that they are justified without reference to the content of the regulated speech, (2) that they are narrowly tailored, (3) to serve a significant governmental interest, and (4) that they leave open ample alternative channels for communication of the information.
Applying this test, the Court found that the restrictions in the ordinance were valid. The ordinance: (1) did not distinguish between commercial and non-commercial speech; (2) was “content neutral”—i.e. they didn’t depend on the message being displayed on the billboard; (3) furthered the Township’s interest in traffic safety and community aesthetics; and (4) was a reasonable fit with the Township’s goals. Further, the Court emphasized the fact that the ordinance did not restrict Hucul from communicating its speech through alternate channels.
© 2012 Varnum LLP
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