Peyton Rhodes (Bloomberg Law): Utah’s Targeted Ad Tax Draws First Challenge from Advocacy Group
The Utah Taxpayers Association is taking aim at the 4.7% levy on targeted advertising entities’ gross receipts signed into law in March. The federal Internet Tax Freedom Act and the US Constitution’s Commerce Clause and Due Process Clause preempt the state’s tax, according to the complaint obtained by Bloomberg Law.
Utah’s tax — which would become active January 1, 2027 — runs afoul of ITFA because its effective definition of targeted advertising excludes ads not delivered through the internet, according to the complaint filed in the state’s Third Judicial District Court.
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