Apple’s challenge to Maryland’s tax on digital advertising will move forward, after a judge denied the state’s motion to dismiss the case on Friday.

Maryland Tax Court Chief Judge Anthony C. Wisniewski ruled from the bench that the case would proceed after more than 90 minutes of nuanced arguments over procedural issues from lawyers for Apple and the Comptroller of Maryland.

The tax applies to companies based on the amount of money they make on ads that are shown to Marylanders as they click and scroll their way around the internet, and was designed to raise money for public schools.

Tech and advertising companies have argued that the tax — believed to be the first of its kind in the nation — is inappropriate on multiple grounds, including that it’s unfairly punitive against internet companies. Friday’s hearing centered on Apple’s efforts to receive a refund for digital ad tax paid by the company; arguments about the tax’s constitutionality will be heard later.

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Apple is the first of more than a dozen tech and advertising companies that have taken their objection to the digital ad tax to the tax court. A prior legal challenge by Comcast and others in the regular civil court system was unsuccessful, after the state’s highest court ruled this spring that they hadn’t exhausted all of their administrative remedies.

But for a few months before the state’s highest court’s ruling, the tax was deemed invalid by a lower court. In November 2022, when the lower court ruling was in place, Apple tried to get the comptroller to refund what it had paid in the tax so far that year — about $755,000, according to testimony on Friday.

The comptroller argued that Apple didn’t file for the refund appropriately or at the correct time and therefore the challenge should be dismissed. Lawyers for both sides went back and forth on deeply technical and legal points during Friday’s hearing.

Apple’s lawyer — Deborah B. Baum of the Washington, D.C., firm Pillsbury Winthrop Shaw Pittman — said the company acted appropriately.

“It has endeavored in good faith to do everything it needed to do to submit its claim for a refund,” she said.

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Murray Singerman, an assistant attorney general representing the Office of the Comptroller, maintained that Apple hadn’t properly sought a refund and that the comptroller has collected the tax in accordance with the law.

With Wisniewski ruling against the comptroller’s motion to dismiss, the case will now head to a full hearing at a later date.

Pamela Wood covers Maryland politics and government. She previously reported for The Baltimore Sun, The Capital and other Maryland newspapers. A graduate of the University of Maryland, College Park, she lives in northern Anne Arundel County.

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