Bill > H3263

This bill establishes a new tax on digital advertising revenues for companies operating in Massachusetts, targeting businesses with significant digital advertising income. The tax applies to companies earning at least $100,000 annually from digital advertising services within the state, with graduated tax rates based on total annual revenues: 5% for companies earning between $50-100 million, 10% for those earning between $100-200 million, and 15% for companies earning over $200 million. Digital advertising services are defined broadly, including banner ads, search engine advertising, sponsored content, and other similar online advertising formats. Companies meeting the revenue threshold must file annual and quarterly tax returns, with detailed reporting requirements and provisions for tax assessment if returns are not filed or are incomplete. The tax will be calculated based on revenues generated from digital advertisements served to users with Massachusetts IP addresses or users presumed to be located in the state. Businesses must maintain comprehensive records of their digital advertising services and the basis for tax calculations. The new tax law is set to take effect on January 1, 2026, giving businesses time to prepare for the new taxation framework.

Budget and Finance

https://malegislature.gov/Bills/194/H3263