Massachusetts H 3081: An Act establishing a tax on local revenues from digital advertising

Bill Text

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HOUSE DOCKET, NO. 3210 FILED ON: 2/18/2021
HOUSE . . . . . . . . . . . . . . . No. 3081

The Commonwealth of Massachusetts
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PRESENTED BY:
Erika Uyterhoeven and Adam G. Hinds
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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act establishing a tax on local revenues from digital advertising.
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PETITION OF:

NAME: DISTRICT/ADDRESS: DATE ADDED:
Erika Uyterhoeven 27th Middlesex 2/18/2021
Adam G. Hinds Berkshire, Hampshire, Franklin and
Hampden
2/18/2021

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HOUSE DOCKET, NO. 3210 FILED ON: 2/18/2021
HOUSE . . . . . . . . . . . . . . . No. 3081
By Representative Uyterhoeven of Somerville and Senator Hinds, a joint petition (accompanied
by bill, House, No. 3081) of Erika Uyterhoeven and Adam G. Hinds for leglsiation to establish a
tax on local revenues from digital advertising. Revenue.

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-Second General Court
(2021-2022)
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An Act establishing a tax on local revenues from digital advertising.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:

1 SECTION 1. The General Laws are hereby amended by inserting after chapter 64N the
2 following chapter:
3 CHAPTER 64O
4 DIGITAL ADVERTISING LOCAL REVENUES TAX.
5 Section 1. As used in this chapter, terms shall have the following meanings:
6 (a) “annual revenues” means income or revenue from all sources, before any expenses or
7 taxes, computed according to generally accepted accounting principles earned in the
8 commonwealth.
9 (b) “assessable base” means the annual revenues derived from digital advertising services
10 in the commonwealth.

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11 (c) “commissioner” means the commissioner of revenue.
12 (d) “digital advertising services” includes advertisement services on a digital interface,
13 including advertisements in the form of banner advertising, search engine advertising, interstitial
14 advertising, promoted, boosted, or sponsored content, and other comparable advertising services.
15 (e) “digital interface” means any type of software, including a website, part of a website,
16 application, or part of an application, that a user is able to access.
17 (f) “user” means an individual or any other person who accesses a digital interface with a
18 device.
19 Section 2. The commissioner shall impose a tax on annual gross revenues of a person
20 derived from digital advertising services in the commonwealth. For the purposes of this chapter,
21 digital advertising services are provided in the commonwealth if the digital advertising services
22 appear on the device of a user:
23 (a) with an Internet Protocol address that indicates the user’s devices is located in the
24 commonwealth; OR
25 (b) who is known or reasonably presumed to be using the device in the commonwealth.
26 Section 3. The digital advertising gross revenues tax rate shall be:
27 (a) 5 per cent of the assessable base for a person with annual gross revenues of
28 $50,000,000 through $100,000,000;
29 (b) 10 per cent of the assessable base for a person with annual gross revenues of
30 $100,000,001 through $200,000,000; AND

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31 (c) 15 per cent of the assessable base for a person with annual gross revenues exceeding
32 $200,000,001.
33 Section 4. Each person that, in a calendar year, has annual gross revenues derived from
34 digital advertising services in the commonwealth of at least $100,000 shall complete, under oath,
35 and file with the commissioner a return, on or before April 15 the next year.
36 Each person that reasonably expects the person’s annual gross revenues derived from
37 digital advertising services in the commonwealth to exceed $100,000 shall complete, under oath,
38 and file with the commissioner a declaration of estimated tax, on or before April 15 of that year.
39 Such a person shall also complete and file with the commissioner a quarterly estimated tax return
40 on or before June 15, September 15, and December 15 of that year.
41 A person required to file a return under this section shall file with the return an
42 attachment that states any information that the commissioner requires to determine annual gross
43 revenues derived from digital advertising services in the commonwealth.
44 A person required to file a return under this section shall maintain records of digital
45 advertising services provided in the commonwealth and the basis for the calculation of the digital
46 advertising gross revenues tax owed.
47 Section 5. (a) Except as required in subsection (b) of this section, each person required to
48 file a return under this chapter shall pay the digital advertising gross revenues tax with the return
49 that covers the period for which the tax is due.
50 (b) A pers