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Maryland's statehous. Photo: Jonathan Newton/The Washington Post via Getty Images

A group of tech industry trade associations sued the state of Maryland Thursday over its newly enacted tax on digital ads targeted at state residents.

Driving the news: Last week, the Maryland legislature voted to overturn Republican Gov. Larry Hogan's veto of the state's first-in-the-nation digital tax law, which aims to raise money for education initiatives in the state by taxing digital advertising from the biggest companies.

What's happening: The U.S. Chamber of Commerce, the Internet Association, NetChoice, the Computer & Communications Industry Association, and TechNet joined in the complaint, filed in the U.S. District Court for the Northern Division of Maryland.

  • Their lawsuit asserts that Maryland's tax violates the federal Internet Tax Freedom Act and also the Constitution's due process clause “by burdening and penalizing purely out-of-state conduct."

Critics of Maryland's tax say it is unfair, discriminatory, hurts the economy during a pandemic, and is unconstitutional. Maryland has estimated the law would earn the state about $250 million annually.

  • States have been forging ahead with their own tech policy laws as the federal government stalls, as Axios reported last week. The legislation resembles similar efforts to tax large American tech companies in Europe.

Between the lines: Most of the groups backing the suit get extensive tech industry funding and generally fight these battles on behalf of the greater industry. The groups also hope the lawsuit will discourage other states from considering similar measures.

What they're saying: "The premise of the law is deeply flawed. ... [T]he Act will raise costs for consumers and make it more difficult for businesses to connect with potential customers," the lawsuit reads.

  • “While the legislation is designed to directly target certain large, mostly out-of-state companies, it will ultimately be bad for Maryland businesses of all sizes," said Linda Moore, president and CEO of TechNet. "Instead of spending scarce resources defending a discriminatory charge, the state should repeal the law and focus on policies that support the many businesses already suffering from the COVID-19 pandemic.”

Go deeper

Updated 3 hours ago - World

UK government: Kremlin has plan "to install pro-Russian leadership" in Ukraine

British Foreign Secretary Elizabeth Truss. Photo: Gints Ivuskans / AFP via Getty Images

The United Kingdom's Foreign Secretary on Saturday night said the government has "information that indicates the Russian Government is looking to install a pro-Russian leader in Kyiv as it considers whether to invade and occupy Ukraine."

Driving the news: U.S. National Security Council spokeswoman Emily Horne called the intelligence "deeply concerning" in a statement to Axios. The Biden administration has said Russia is actively manufacturing a pretext for invasion and warned that Putin could use joint military exercises in Belarus as cover to invade from the north.

Updated 4 hours ago - Science

This powerful new accelerator looks for keys to the center of atoms

Illustration: Eniola Odetunde/Axios

Nuclear physicists trying to piece together how atoms are built are about to get a powerful new tool.

Why it matters: When the Facility for Rare Isotope Beams begins experiments later this spring, physicists from around the world will use the particle accelerator to better understand the inner workings of atoms that make up all the matter that can be seen in the universe.

Updated 4 hours ago - Politics & Policy

Omicron dashboard

Illustration: Aïda Amer/Axios

  1. Health: FDA OKs antiviral drug remdesivir for non-hospitalized COVID patients — Walensky: CDC language "pivoting" on "fully vaccinated" — Pfizer and Moderna boosters overwhelmingly prevent Omicron hospitalizations, CDC finds.
  2. Vaccines: The case for Operation Warp Speed 2.0 — Teens and adults missed 37 million vaccinations during COVID — Team USA 100% vaccinated against COVID ahead of Beijing Olympics — Kids' COVID vaccination rates are particularly low in rural America — Annual COVID vaccine preferable to boosters, says Pfizer CEO.
  3. Politics: Arizona governor sues Biden administration over COVID funds tied to mandates — Biden concedes U.S. should have done more testing — Arizona says it "will not be intimidated" by Biden on anti-mask school policies.
  4. World: American Airlines flight to London forced to turn around over mask dispute — WHO: COVID health emergency could end this year — Greece imposes vaccine mandate for people 60 and older — Austria approves COVID vaccine mandate for adults — Beijing officials urge COVID-19 "emergency mode" before Winter Olympics.
  5. Variant tracker