Articles & Legal Insights
Practical legal guidance and timely updates from The Karam Firm — helping individuals and businesses navigate complex legal landscapes with confidence.
California OTA Rejects R&D Credit Maryland Digital Advertising Tax Ruling Raises Questions for Illinois’s New Targeted Advertising Tax
A significant Maryland tax decision may provide an early roadmap for challenges to Illinois’s new targeted advertising tax before the Illinois tax even takes effect.
On August 14, 2026, the Maryland Tax Court issued companion decisions in Apple Inc. v. Comptroller of Maryland, Google LLC v. Comptroller of Maryland, and Peacock TV, LLC v. Comptroller of Maryland, invalidating Maryland’s Digital Advertising Gross Revenues Tax.
The court concluded that Maryland’s tax violated the federal Internet Tax Freedom Act (“ITFA”), the dormant Commerce Clause, and the Due Process Clause. In the Peacock TV case, the court also found a First Amendment problem associated with Maryland’s exemption for certain broadcast and news media entities. The court reversed the Comptroller’s denial of the taxpayers’ 2022 refund claims and ordered refunds with interest.
The decisions are particularly timely for Illinois.
Illinois recently enacted the Targeted Advertising Services Tax Act, which imposes a 10% tax beginning January 1, 2027 on gross receipts from qualifying targeted advertising services provided in Illinois. The Illinois law generally applies when a provider’s annual cumulative Illinois gross receipts from targeted advertising services exceed $1 million during the preceding 12-month period.
Maryland’s decisions do not determine whether the Illinois tax is valid. The two statutes contain important differences. But some of the Maryland Tax Court’s reasoning—particularly under ITFA—could become relevant if Illinois’s tax is challenged.
Colorado Netflix Sales-Tax Settlement Leaves Digital-Product Taxability Unresolved
California's rules for taxing compensation received after an individual leaves the state can be surprisingly complex. A recent California Office of Tax Appeals ("OTA") decision illustrates why the answer may depend not simply on when a payment is received—or even how it appears on a Form W-2—but on the legal character of the payment and what the taxpayer received the payment for.
In Appeal of J. Otting and Y. Otting, 2026-OTA-403P, the OTA considered whether compensation received by a former California resident after relocating to Nevada remained taxable by California. The amounts at issue included severance payments, employer-paid medical benefits, and restricted stock units ("RSUs").
Book a Free Consultation
Important Notice Before Submitting This Form
Submitting this form does not create an attorney-client relationship with The Karam Firm, PLLC or any attorney at the firm. No attorney-client relationship is formed unless and until the firm has completed a conflict-of-interest review, agreed in writing to represent you, and you have signed a written engagement agreement.
Please do not submit confidential, privileged, sensitive, or highly detailed information through this form. The purpose of this form is only to allow the firm to determine whether it may be able to assist you and whether a consultation may be appropriate. You should provide only general information, such as your name, contact information, the type of tax issue involved, the taxing authority involved, relevant deadlines, and a brief description of the matter.
Information submitted through this form may be reviewed to evaluate whether the firm can consider a potential representation, including whether any conflict of interest exists. The firm is not obligated to keep information confidential unless required by applicable rules of professional conduct or unless an attorney-client relationship is later established by written agreement.
By submitting this form, you acknowledge and agree that:
You are not becoming a client of The Karam Firm, PLLC;
The firm has not agreed to represent you;
You should not rely on the submission of this form as legal or tax advice;
You remain responsible for all applicable deadlines, including IRS, state tax, court, administrative, appeal, protest, refund-claim, and response deadlines; and
The firm may decline the representation for any reason, including a conflict of interest.
If your matter involves an urgent deadline, you should contact legal counsel immediately and should not wait for a response to this form.