EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*hb0414*
HOUSE BILL 414
J1, Q7 5lr0997
HB 1372/24 – W&M
By: Delegates Martinez and Young
Introduced and read first time: January 16, 2025
Assigned to: Ways and Means
A BILL ENTITLED
AN ACT concerning 1
Health and Taxation – Digital Social Media Services and the Mental Health Care 2
Fund for Children and Youth 3
FOR the purpose of establishing the Mental Health Care Fund for Children and Youth as 4
a special, nonlapsing fund to improve access to mental health care services to 5
children and youth in the State; imposing a tax on certain annual revenues derived 6
from certain digital social media services in the State; providing for the calculation 7
and collection of the tax; requiring the Comptroller to distribute revenue from the 8
tax in a certain manner; and generally relating to the digital social media gross 9
revenues tax and mental health care services for children and youth. 10
BY adding to 11
Article – Health – General 12
Section 10–209 13
Annotated Code of Maryland 14
(2023 Replacement Volume and 2024 Supplement) 15
BY repealing and reenacting, without amendments, 16
Article – State Finance and Procurement 17
Section 6–226(a)(2)(i) 18
Annotated Code of Maryland 19
(2021 Replacement Volume and 2024 Supplement) 20
BY repealing and reenacting, with amendments, 21
Article – State Finance and Procurement 22
Section 6–226(a)(2)(ii)204. and 205. 23
Annotated Code of Maryland 24
(2021 Replacement Volume and 2024 Supplement) 25
BY adding to 26
Article – State Finance and Procurement 27 2 HOUSE BILL 414
Section 6–226(a)(2)(ii)206. 1
Annotated Code of Maryland 2
(2021 Replacement Volume and 2024 Supplement) 3
BY repealing and reenacting, without amendments, 4
Article – Tax – General 5
Section 1–101(a) 6
Annotated Code of Maryland 7
(2022 Replacement Volume and 2024 Supplement) 8
BY repealing and reenacting, with amendments, 9
Article – Tax – General 10
Section 1–101(g–2), 2–102(a), 13–201(4), 13–402(a)(5) and (6), 13–602(a), 13–702(a), 11
13–1002(b) and (c), and 13–1101(b) and (c) 12
Annotated Code of Maryland 13
(2022 Replacement Volume and 2024 Supplement) 14
BY adding to 15
Article – Tax – General 16
Section 1–101(g–2); 2–4B–01 and 2–4B–02 to be under the new subtitle “Subtitle 4B. 17
Digital Social Media Gross Revenues Tax Distribution”; 7.7–101 through 18
7.7–301 to be under the new title “Title 7.7. Digital Social Media Gross 19
Revenues Tax”; and 13–402(a)(7) and 13–1001(h) 20
Annotated Code of Maryland 21
(2022 Replacement Volume and 2024 Supplement) 22
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARY LAND, 23
That the Laws of Maryland read as follows: 24
Article – Health – General 25
10–209. 26
(A) IN THIS SECTION, “FUND” MEANS THE MENTAL HEALTH CARE FUND 27
FOR CHILDREN AND YOUTH. 28
(B) THERE IS A MENTAL HEALTH CARE FUND FOR CHILDREN AND YOUTH. 29
(C) THE PURPOSE OF THE FUND IS TO IMPROVE AC CESS TO MENTAL 30
HEALTH CARE SERVICES FOR CHILDREN AND YOU TH IN THE STATE. 31
(D) THE SECRETARY SHALL ADMIN ISTER THE FUND. 32
(E) (1) THE FUND IS A SPECIAL , NONLAPSING FUND THAT IS NOT 33
SUBJECT TO § 7–302 OF THE STATE FINANCE AND PROCUREMENT ARTICLE. 34
HOUSE BILL 414 3
(2) THE STATE TREASURER SHALL HOLD THE FUND SEPARATELY , 1
AND THE COMPTROLLER SHALL ACC OUNT FOR THE FUND. 2
(F) THE FUND CONSISTS OF : 3
(1) REVENUE DISTRIBUTED T O THE FUND UNDER TITLE 2, SUBTITLE 4
4B OF THE TAX – GENERAL ARTICLE; 5
(2) MONEY APPROPRIATED IN THE STATE BUDGET TO THE FUND; 6
(3) INTEREST EARNINGS OF THE FUND; AND 7
(4) ANY OTHER MONEY FROM ANY OTHER SOURCE ACC EPTED FOR 8
THE BENEFIT OF THE FUND. 9
(G) THE FUND MAY BE USED ONLY FOR IMPROVING ACCESS TO MENTAL 10
HEALTH CARE SER VICES FOR CHILDREN A ND YOUTH IN THE STATE. 11
(H) (1) THE STATE TREASURER SHALL INVES T THE MONEY OF THE FUND 12
IN THE SAME MANNER A S OTHER STATE MONEY MAY BE IN VESTED. 13
(2) ANY INTEREST EARNINGS OF THE FUND SHALL BE CREDITE D TO 14
THE FUND. 15
(I) EXPENDITURES FROM THE FUND MAY BE MADE ONLY IN ACCORDANCE 16
WITH THE STATE BUDGET . 17
(J) MONEY EXPENDED FROM T HE FUND FOR IMPROVING AC CESS TO 18
MENTAL HEALTH CARE F OR CHILDREN AND YOUT H IN THE STATE IS SUPPLEMENTAL 19
TO AND IS NOT INTEND ED TO TAKE THE PLACE OF FUNDING THAT OTHERWISE 20
WOULD BE APPROPRIATE D FOR IMPROVING ACCE SS TO MENTAL HEALTH CARE FOR 21
CHILDREN AND YOUTH I N THE STATE. 22
Article – State Finance and Procurement 23
6–226. 24
(a) (2) (i) 1. This subparagraph does not apply in fiscal years 2024 25
through 2028. 26
2. Notwithstanding any other provision of law, and unless 27
inconsistent with a federal law, grant agreement, or other federal requirement or with the 28
terms of a gift or settlement agreement, net interest on all State money allocated by the 29
State Treasurer under this section to special funds or accounts, and otherwise entitled to 30 4 HOUSE BILL 414
receive interest earnings, as accounted for by the Comptroller, shall accrue to the General 1
Fund of the State. 2
(ii) The provisions of subparagraph (i) of this paragraph do not apply 3
to the following funds: 4
204. the Victims of Domestic Violence Program Grant Fund; 5
[and] 6
205. the Proposed Programs Collaborative Grant Fund; AND 7
206. THE MENTAL HEALTH CARE FUND FOR CHILDREN 8
AND YOUTH. 9
SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 10
as follows: 11
Article – Tax – General 12
1–101. 13
(a) In this article the following words have the meanings indicated. 14
(G–2) “DIGITAL SOCIAL MEDIA GROSS REVENUES TAX ” MEANS THE TAX 15
IMPOSED UNDER TITLE 7.7 OF THIS ARTICLE. 16
[(g–2)] (G–3) (1) “Executive Director” means the Executive Director of the 17
Alcohol, Tobacco, and Cannabis Commission. 18
(2) “Executive Director” includes a deputy, an inspector, or any other 19
individual acting within the scope of the Executive Director’s authority. 20
2–102. 21
(a) In addition to the duties set forth elsewhere in this article and in other articles 22
of the Code, the Comptroller shall administer the laws that relate to: 23
(1) the admissions and amusement tax; 24
(2) the boxing and wrestling tax; 25
(3) the digital advertising gross revenues tax; 26
(4) THE DIGITAL SOCIAL M EDIA GROSS REVENUES TAX; 27
(5) the income tax; 28 HOUSE BILL 414 5
[(5)] (6) the Maryland estate tax; 1
[(6)] (7) the Maryland generation–skipping transfer tax; 2
[(7)] (8) the motor carrier tax; 3
[(8)] (9) the motor fuel tax; 4
[(9)] (10) the sales and use tax; and 5
[(10)] (11) the savings and loan association franchise tax. 6
SUBTITLE 4B. DIGITAL SOCIAL MEDIA GROSS REVENUES TAX DISTRIBUTION. 7
2–4B–01. 8
FROM THE DIGITAL SOCI AL MEDIA GROSS REVENUES TAX REVENUE , THE 9
COMPTROLLER SHALL DIS TRIBUTE EACH QUARTER THE AMOUNT NECESSARY TO 10
ADMINISTER THE DIGIT AL SOCIAL MEDIA GROS S REVENUES TAX LAWS IN THE 11
PREVIOUS QUARTER TO AN ADMINISTRATIVE CO ST ACCOUNT. 12
2–4B–02. 13
AFTER MAKING THE DIST RIBUTION RE QUIRED UNDER § 2–4B–01 OF THIS 14
SUBTITLE, THE COMPTROLLER SHALL DIS TRIBUTE THE REMAININ G DIGITAL 15
SOCIAL MEDIA GROSS R EVENUES TAX REVENUE TO THE MENTAL HEALTH CARE 16
FUND FOR CHILDREN AND YOUTH ESTABLISHED UND ER § 10–209 OF THE 17
HEALTH – GENERAL ARTICLE. 18
TITLE 7.7. DIGITAL SOCIAL MEDIA GROSS REVENUES TAX. 19
SUBTITLE 1. DEFINITIONS; GENERAL PROVISIONS. 20
7.7–101. 21
(A) IN THIS TITLE THE FOL LOWING WORDS HAVE TH E MEANINGS 22
INDICATED. 23
(B) “ANNUAL GROSS REVENUES ” MEANS INCOME OR REVE NUE FROM ALL 24
SOURCES, BEFORE ANY EXPENSES OR TAXES , COMPUTED ACCORDING T O 25
GENERALLY ACCEPTED A CCOUNTING PRINCIPLES . 26
(C) “ASSESSABLE BASE ” MEANS THE ANNUAL GRO SS REVENUES DERIVED 27 6 HOUSE BILL 414
FROM DIGITAL SOCIAL MEDIA SERVICES IN TH E STATE. 1
(D) (1) “DIGITAL SOCIAL MEDIA SERVICE” MEANS A SERVICE PROVIDED 2
TO THE PUBLIC THROUG H AN INTERNET WEBSITE OR A MOBILE APPLICATION T HAT: 3
(I) INCLUDES FEATURES TH AT ALLOW A USER TO S HARE 4
IMAGES, TEXT, OR VIDEO THROUGH THE INTERNET WITH OTHER U SERS OF THE 5
SERVICE WHOM THE USE R HAS MET, IDENTIFIED, OR BECOME A WARE OF THROUGH 6
THE USE OF THE SERVI CE; AND 7
(II) HAS MORE THAN 1,000,000 MONTHLY ACTIVE USERS IN THE 8
UNITED STATES OR GENERATES M ORE THAN $500,000,000 IN ANNUAL GROSS 9
REVENUE, ADJUSTED ANNUALLY FO R INFLATION. 10
(2) “DIGITAL SOCIAL MEDIA SERVICE” DOES NOT INCLUDE A SERVIC E 11
THAT IS PRIMARILY US ED FOR: 12
(I) THE SALE OR PROVISIO N OF PROFESSIONAL SE RVICES; 13
(II) THE SALE OF COMMERCI AL PRODUCTS ; OR 14
(III) IF THE SERVICE DOES NOT INCLUDE THE ABIL ITY FOR 15
CONTENT TO BE SENT B Y A USER DIRECTLY TO ANOTHER USER, THE PROVISION OF 16
NEWS OR INFORMATION . 17
(E) “USER” MEANS AN INDIVIDUAL OR ANY OTHER PERSON WHO ACCESSES 18
A DIGITAL INTERFACE WITH A DEVICE. 19
7.7–102. 20
(A) A TAX IS IMPOSED ON AN NUAL GROSS REVENUES OF A PERSON DERIVED 21
FROM DIGITAL SOCIAL MEDIA SERVICES IN THE STATE. 22
(B) (1) FOR PURPOSES OF THIS TITLE, THE PART OF THE ANNU AL GROSS 23
REVENUES OF A PERSON DERIVED FROM DIGITAL SOCIAL MEDIA SERVICE S IN THE 24
STATE SHALL BE DETERM INED USING AN APPORT IONMENT FRACTION : 25
(I) THE NUMERATOR OF WHI CH IS THE ANN UAL GROSS 26
REVENUES OF A PERSON DERIVED FROM DIGITAL SOCIAL MEDIA SERVICE S IN THE 27
STATE; AND 28
(II) THE DENOMINATOR OF W HICH IS THE ANNUAL G ROSS 29
REVENUES OF A PERSON DERIVED FROM DIGITAL SOCIAL MEDIA SERVICE S IN THE 30 HOUSE BILL 414 7
UNITED STATES. 1
(2) THE COMPTROLLER SHALL ADOPT REGULATI ONS THAT 2
DETERMINE THE STATE FROM WHICH REVENUES FROM DIGITAL SOCIAL MEDIA 3
SERVICES ARE DERIVED . 4
7.7–103. 5
THE DIGITAL SOCIAL ME DIA GROSS REVENUES T AX RATE IS: 6
(1) 5% OF THE ASSESSABLE BA SE FOR A PERSON WITH GLOBAL 7
ANNUAL GROSS REV ENUES OF $500,000,000 THROUGH $1,000,000,000; 8
(2) 7.5% OF THE ASSESSABLE BA SE FOR A PERSON WITH GLOBAL 9
ANNUAL GROSS REVENUE S OF $1,000,000,001 THROUGH $10,000,000,000; AND 10
(3) 10% OF THE ASSESSABLE BA SE FOR A PERSON WITH GLOBAL 11
ANNUAL GROSS REVENUE S EXCEEDING $10,000,000,000. 12
SUBTITLE 2. RETURNS. 13
7.7–201. 14
(A) EACH PERSON THAT , IN A CALENDAR YEAR , HAS ANNUAL GROSS 15
REVENUES DERIVED FRO M DIGITAL SOCIAL MED IA SERVICES IN THE STATE OF AT 16
LEAST $1,000,000 SHALL COMPLETE , UNDER OATH , AND FILE WITH THE 17
COMPTROLLER A RETURN , ON OR BEFORE APRIL 15 OF THE NEXT YEAR . 18
(B) (1) EACH PERSON THAT REAS ONABLY EXPECTS THE P ERSON’S 19
ANNUAL GROSS REVENUE S DERIVED FROM DIGIT AL SOCIAL MEDIA SERV ICES IN THE 20
STATE TO EXCEED $1,000,000 SHALL COMPLETE , UNDER OATH , AND FILE WITH THE 21
COMPTROLLER A DECLARA TION OF ESTIMATED TA X, ON OR BEFORE APRIL 15 OF 22
THAT YEAR. 23
(2) A PERSON REQUIRED UNDE R PARAGRAPH (1) OF THIS 24
SUBSECTION TO FILE A DECLARATION OF ESTIM ATED TAX FOR A TAXAB LE YEAR 25
SHALL COMPLETE AND F ILE WITH THE COMPTROLLER A QUARTERLY ESTIMATE D 26
TAX RETURN ON OR BEF ORE JUNE 15, SEPTEMBER 15, AND DECEMBER 15 OF THAT 27
YEAR. 28
(C) A PERSON REQUIRED TO F ILE A RETURN UNDER T HIS SECTION SHALL 29
FILE WITH THE RETURN AN ATTACHMENT THAT S TATES ANY INFORMATIO N THAT 30
THE COMPTROLLER REQUIRE S TO DETERMINE ANNUA L GROSS REVENUES DER IVED 31 8 HOUSE BILL 414
FROM DIGITAL SOCIAL MEDIA SERVICES IN TH E STATE. 1
7.7–202. 2
A PERSON REQUIRED TO F ILE A RETURN UNDER § 7.7–201 OF THIS SUBTITLE 3
SHALL MAINTAIN RECOR DS OF DIGITAL SOCIAL MEDIA SERVICES PROVI DED IN THE 4
STATE AND THE BASIS FOR THE CA LCULATION OF THE DIG ITAL SOCIAL MEDIA 5
GROSS REVENUES TAX O WED. 6
SUBTITLE 3. TAX PAYMENT. 7
7.7–301. 8
(A) EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION , EACH 9
PERSON REQUIRED TO F ILE A RETURN UNDER § 7.7–201 OF THIS TITLE SHALL PAY 10
THE DIGITAL SOCIAL M EDIA GROSS REVENUES TAX WITH THE RETURN THAT COVERS 11
THE PERIOD FOR WHICH THE TAX IS DUE. 12
(B) A PERSON REQUIRED TO F ILE ESTIMATED DIGITA L SOCIAL MEDIA 13
GROSS REVENUES TAX R ETURNS UNDER § 7.7–201(B) OF THIS TITLE SHALL PAY: 14
(1) AT LEAST 25% OF THE ESTIMATED DIG ITAL SOCIAL MEDIA GR OSS 15
REVENUES TAX SHOWN O N THE DECLARATION OR AMENDED DECLARATION FOR A 16
TAXABLE YEAR : 17
(I) WITH THE DECLARATION OR AMENDED DECLARATI ON THAT 18
COVERS THE YEAR ; AND 19
(II) WITH EACH QUARTERLY RETURN FOR THAT YEAR; AND 20
(2) ANY UNPAID DIGITAL S OCIAL MEDIA GROSS RE VENUES TAX FOR 21
THE YEAR SHOWN ON TH E PERSON’S RETURN THAT COVERS THAT YEAR WITH THE 22
RETURN. 23
13–201. 24
In this subtitle, “tax information” means: 25
(4) any information contained in: 26
(i) an admissions and amusement tax return; 27
(ii) an alcoholic beverage tax return; 28
HOUSE BILL 414 9
(iii) a bay restoration fee return; 1
(iv) a boxing and wrestling tax return; 2
(v) a digital advertising gross revenues tax return; 3
(VI) A DIGITAL SOCIAL MED IA GROSS REVENUES TAX RETU RN; 4
[(vi)] (VII) an E–9–1–1 fee return; 5
[(vii)] (VIII) a financial institution franchise tax return; 6
[(viii)] (IX) an inheritance tax return; 7
[(ix)] (X) a Maryland estate tax return; 8
[(x)] (XI) a motor carrier tax return; 9
[(xi)] (XII) a motor fuel tax return; 10
[(xii)] (XIII) an other tobacco products tax return; 11
[(xiii)] (XIV) a public service company franchise tax return; 12
[(xiv)] (XV) a sales and use tax return; 13
[(xv)] (XVI) a savings and loan association franchise tax return; 14
[(xvi)] (XVII) a tire recycling fee return; 15
[(xvii)] (XVIII) a tobacco tax return; or 16
[(xviii)] (XIX) a transportation services assessment return. 17
13–402. 18
(a) If a notice and demand for a return is made under § 13–303 of this title and 19
the person or governmental unit fails to file the return, the tax collector shall: 20
(5) for public service company franchise tax: 21
(i) estimate gross receipts from the best information in the 22
possession of the tax collector; and 23
(ii) assess the tax due on the estimated gross receipts; [and] 24
10 HOUSE BILL 414
(6) for digital advertising gross revenues tax: 1
(i) estimate gross revenues from the best information in possession 2
of the tax collector; and 3
(ii) assess the tax due on the estimated assessable base; AND 4
(7) FOR DIGITAL SOCIAL M EDIA GROSS REVENUES TAX: 5
(I) ESTIMATE GROSS REVEN UES FROM THE BEST 6
INFORMATION IN POSSE SSION OF THE TAX COL LECTOR; AND 7
(II) ASSESS THE TAX DUE O N THE ESTIMATED ASSE SSABLE 8
BASE. 9
13–602. 10
(a) Except as provided in subsections (b) and (c) of this section, a tax collector 11
shall assess interest on unpaid tax from the due date to the date on which the tax is paid if 12
a person who is required to estimate and pay digital advertising gross revenues tax, 13
DIGITAL SOCIAL MEDIA GROSS REVENUES TAX , financial institution franchise tax, 14
public service company franchise tax, or income tax under § 7.5–301, § 7.7–301, § 8–210(b), 15
§ 8–405(b), or § 10–902 of this article: 16
(1) fails to pay an installment when due; or 17
(2) estimates a tax that is: 18
(i) less than 90% of the tax required to be shown on the return for 19
the current taxable year; and 20
(ii) less than 110% of the tax paid for the prior taxable year, reduced 21
by the credit allowed under § 10–703 of this article. 22
13–702. 23
(a) Except as provided in subsections (b) and (c) of this section, a tax collector 24
shall assess a penalty not exceeding 25% of the amount underestimated, if a person who is 25
required to estimate and pay digital advertising gross revenues tax, DIGITAL SOCIAL 26
MEDIA GROSS REVENUES TAX, financial institution franchise tax, public service company 27
franchise tax, or income tax under § 7.5–301, § 7.7–301, § 8–210(b), § 8–405(b), or § 28
10–902 of this article: 29
(1) fails to pay an installment when due; or 30
(2) estimates a tax that is: 31 HOUSE BILL 414 11
(i) less than 90% of the tax required to be shown on the return for 1
the current taxable year; and 2
(ii) less than 110% of the tax paid for the prior taxable year, reduced 3
by the credit allowed under § 10–703 of this article. 4
13–1001. 5
(H) A PERSON WHO IS REQUIR ED TO FILE A DIGITAL SOCIAL MEDIA GROSS 6
REVENUES TAX RETURN AND WHO WILLFULLY FA ILS TO FILE THE RETU RN AS 7
REQUIRED UNDER TITLE 7.7 OF THIS ARTICLE IS G UILTY OF A MISDEMEAN OR AND, 8
ON CONVICTION , IS SUBJECT TO A FINE NOT EXCEEDING $5,000 OR IMPRISONMENT 9
NOT EXCEEDING 5 YEARS OR BOTH . 10
13–1002. 11
(b) A person, including an officer of a corporation, who willfully files a false digital 12
advertising gross revenues tax return, A FALSE DIG ITAL SOCIAL MEDIA GR OSS 13
REVENUES TAX RETURN , a false financial institution franchise tax return, a false public 14
service company franchise tax return, or a false income tax return with the intent to evade 15
the payment of tax due under this article is guilty of perjury and, on conviction, is subject 16
to the penalty for perjury. 17
(c) Subsections (a) and (b) of this section apply to the alcoholic beverage, digital 18
advertising gross revenues, DIGITAL SOCIAL MEDIA GROSS REVENUES , financial 19
institution franchise, public service company franchise, and income taxes. 20
13–1101. 21
(b) An assessment of digital advertising gross revenues tax, DIGITAL SOCIAL 22
MEDIA GROSS REVENUES TAX, financial institution franchise tax, public service company 23
franchise tax, income tax, or estate tax may be made at any time if: 24
(1) a false return is filed with the intent to evade the tax; 25
(2) a willful attempt is made to evade the tax; 26
(3) a return is not filed as required under Title 7, Title 7.5, TITLE 7.7, Title 27
8, or Title 10 of this article; 28
(4) an amended estate tax return is not filed as required under Title 7 of 29
this article; 30
(5) an incomplete return is filed; or 31
12 HOUSE BILL 414
(6) a report of federal adjustment is not filed within the period required 1
under § 13–409 of this title. 2
(c) If a report of federal adjustment is filed within the time required under § 3
13–409 of this title, the tax collector shall assess the digital advertising gross revenues tax, 4
DIGITAL SOCIAL MEDIA GROSS REVENUES TAX , financial institution franchise tax, 5
public service company franchise tax, income tax, or estate tax within 1 year after the date 6
on which the tax collector receives the report. 7
SECTION 3. AND BE IT FURTHER ENACTED, That Section 2 of this Act shall be 8
applicable to all taxable years beginning after December 31, 2025. 9
SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect July 10
1, 2025. 11