U.S. States Overhaul Tax Rules for Digital Ads, AI, and Data Monetization

From Maryland's digital ad tax to New York's plan to tax user data, businesses face a compliance maze. Will your state be next to rewrite the rules?

, and ASMedia

2026 March 21 . 9:06 AM

2 min read

The image shows a page from a book with a black and white image of a table of numbers and text,... — The image shows a page from a book with a black and white image of a table of numbers and text, which appears to be a tax plan for the United States. The text is written in black ink on a white background, and the table is divided into columns and rows, with each row representing a different tax plan. The columns are labeled with the names of the tax plans, such as "taxes," "rates," and "duties," and the rows are filled with numerical values.

U.S. States Overhaul Tax Rules for Digital Ads, AI, and Data Monetization

U.S. states are reshaping tax policies to target digital services, AI, and data monetisation. Maryland has already introduced a digital advertising tax, while Washington state and Chicago explore similar measures. These changes come as lawmakers reassess incentives and adjust to federal tax reforms.

Businesses now face growing complexity in compliance, with new rules affecting everything from digital revenue to property tax breaks.

Maryland became the first state to tax digital advertising, setting a precedent for others. Washington state and Chicago are now considering taxes on IT services, social media, and data usage. Meanwhile, proposals in New York would treat user data as a natural resource, taxing companies that profit from it.

No state has yet introduced a specific tax on AI solutions, despite discussions around broader regulations. Colorado and Washington have focused on general AI governance rather than direct taxation. This leaves businesses uncertain about future liabilities in emerging tech sectors. The 2024 *One Big Beautiful Bill Act* (OBBBA) made permanent key parts of the 2017 *Tax Cuts & Jobs Act*, including expanded SALT relief. This shift has forced multinational companies to rethink their tax strategies across states. At the same time, Florida eliminated most property taxes, while Virginia may roll back data center incentives—signalling a broader reassessment of business perks. The U.S. Supreme Court's decision in *Learning Resources, Inc. v. Trump* added another layer of uncertainty. Over $100 billion in tariffs now hang in legal limbo, affecting past sales tax treatments. Companies must also adapt to the elimination of the penny, which creates new risks around pricing, consumer disputes, and potential lawsuits. Corporate tax teams are under pressure to track these changes. Many now rely on cross-department collaboration and specialised tools to avoid penalties. The rapid evolution of digital and AI-related taxes is creating fresh challenges in defining taxable revenue, sourcing rules, and legal jurisdiction.

The shifting tax landscape demands closer attention from businesses operating across multiple states. Digital advertising, data monetisation, and incentive rollbacks are reshaping compliance requirements. Without clear federal guidance, companies must monitor state-level changes to avoid financial and legal pitfalls.