Maryland's tax court just struck down the nation's first digital advertising tax and ordered refunds to Apple, Google, and Peacock TV — handing corporate giants a win while the $250 million a year the tax was projected to raise for K-12 education vanishes into thin air.

The stakes are straightforward: Maryland lawmakers sold this tax in 2021 as a way to make Big Tech pay its share for a sweeping education overhaul. Now a tribunal has said never mind — and ordinary taxpayers will be the ones who either make up the shortfall or watch the promises go unfunded.

The Maryland Tax Court ruled Friday that the digital ad tax violates the federal Internet Tax Freedom Act, the First Amendment, and the commerce and due process clauses of the U.S. Constitution. The court ordered the state to repay taxes already collected from Apple, Google, and Peacock TV.

The law targeted companies with more than $100 million in global annual gross revenues, starting at a 2.5% rate on digital ad revenue and climbing to 10% for companies pulling in $15 billion or more globally. The court found two fatal flaws: Congress, not state legislatures, regulates interstate commerce, and the tax was based on global revenue rather than revenue from in-state advertising.

The Internet Tax Freedom Act bars taxing e-commerce if similar services go untaxed. The tax court found there isn't much difference between digital advertising and print or billboard ads — meaning the federal prohibition applies.

Last year, the 4th U.S. Circuit Court of Appeals already struck down part of the law on First Amendment grounds, ruling it blocked Big Tech companies from telling customers about the tax. Judge Julius Richardson wrote that the restriction violated free speech.

Maryland's top Democrats aren't backing down. Senate President Bill Ferguson and House Speaker Joseline Peña-Melnyk issued a statement saying they "respectfully disagree" with the ruling and expect the legal fight to continue. "We remain committed to ensuring that Maryland's tax system is fair, sustainable, and reflects today's economy," they said.

Fair is the word that does a lot of heavy lifting there. What the court ruling exposes is a structural problem: states are trying to tax multinational corporations that operate across every jurisdiction, using tax frameworks built for a pre-digital economy. When the courts block those efforts, the cost doesn't disappear — it shifts to the people and small businesses who can't afford armies of attorneys.

What neither outlet covering this story examined: who lobbied the tax court, what connections its members have to the tech industry, and whether the same firms bankrolling the legal challenges have revolving-door ties to the officials who appointed the tribunal. The money trail behind this ruling remains unlitigated.

Meanwhile, Apple and Google are fighting on multiple legal fronts. Apple is simultaneously pushing to settle its years-long battle with Epic Games over app store fees, proposing a new commission structure that Epic says violates Ninth Circuit guidance. Google is under court order to open its Play Store to rival app stores and got reprimanded this week by U.S. District Judge James Donato for still burying competitors behind extra steps. These companies have the resources to fight every tax, every fee, every court order — and they do.

The question Maryland taxpayers should be asking isn't just whether this tax was constitutional. It's who, exactly, is going to pay for the promises their legislature already made.