Health and Taxation - Digital Social Media Services and the Mental Health Care Fund for Children and Youth

EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXISTING LAW.
[Brackets] indicate matter deleted from existing law.
*hb0468*

HOUSE BILL 468
J1, Q7 6lr1480
HB 414/25 – W&M
By: Delegates Martinez, Acevero, and Young
Introduced and read first time: January 23, 2026
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 for 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 2025 Supplement) 15

BY repealing and reenacting, without amendments, 16
Article – State Finance and Procurement 17
Section 6–226(a)(2)(i) and (ii) 18
Annotated Code of Maryland 19
(2021 Replacement Volume and 2025 Supplement) 20

BY repealing and reenacting, with amendments, 21
Article – State Finance and Procurement 22
Section 6–226(a)(2)(iii)212. and 213. 23
Annotated Code of Maryland 24
(2021 Replacement Volume and 2025 Supplement) 25

BY adding to 26
Article – State Finance and Procurement 27
2 HOUSE BILL 468

Section 6–226(a)(2)(iii)214. 1
Annotated Code of Maryland 2
(2021 Replacement Volume and 2025 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 2025 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 2025 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 2025 Supplement) 22

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 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 YOUTH IN THE STATE. 31

(D) THE SECRETARY SHALL ADMINISTER 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 468 3

(2) THE STATE TREASURER SHALL HOLD THE FUND SEPARATELY , 1
AND THE COMPTROLLER SHALL ACCOUNT FOR THE FUND. 2

(F) THE FUND CONSISTS OF: 3

(1) REVENUE DISTRIBUTED TO 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 SERVICES FOR CHILDREN AND YOUTH IN THE STATE. 11

(H) (1) THE STATE TREASURER SHALL INVEST THE MONEY OF THE FUND 12
IN THE SAME MANNER AS OTHER STATE MONEY MAY BE INVESTED. 13

(2) ANY INTEREST EARNINGS OF THE FUND SHALL BE CREDITED 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 FOR CHILDREN AND YOUTH IN THE STATE IS SUPPLEMENTAL 19
TO AND IS NOT INTEND ED TO TAKE THE PLACE OF FUNDING THAT OTHE RWISE 20
WOULD BE APPROPRIATED FOR IMPROVING ACCESS TO MENTAL HEALTH CARE FOR 21
CHILDREN AND YOUTH IN THE STATE. 22

Article – State Finance and Procurement 23

6–226. 24

(a) (2) (i) This paragraph does not apply in fiscal years 2024 through 2028. 25

(ii) Notwithstanding any other provision of law, and unless 26
inconsistent with a federal law, grant agreement, or other federal requirement or with the 27
terms of a gift or settlement agreement, net interest on all State money allocated by the 28
State Treasurer under this section to special funds or accounts, and otherwise entitled to 29
receive interest earnings, as accounted for by the Comptroller, shall accrue t o the General 30
4 HOUSE BILL 468

Fund of the State. 1

(iii) The provisions of subparagraph (ii) of this paragraph do not 2
apply to the following funds: 3

212. the Department of Social and Economic Mobility Special 4
Fund; [and] 5

213. the Population Health Improvement Fund; AND 6

214. THE MENTAL HEALTH CARE FUND FOR CHILDREN 7
AND YOUTH. 8

SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 9
as follows: 10

Article – Tax – General 11

1–101. 12

(a) In this article the following words have the meanings indicated. 13

(G–2) “DIGITAL SOCIAL MEDIA GROSS REVENUES TAX ” MEANS THE TAX 14
IMPOSED UNDER TITLE 7.7 OF THIS ARTICLE. 15

[(g–2)] (G–3) (1) “Executive Director” means the Executive Director of the 16
Alcohol, Tobacco, and Cannabis Commission. 17

(2) “Executive Director” includes a deputy, an inspector, or any other 18
individual acting within the scope of the Executive Director’s authority. 19

2–102. 20

(a) In addition to the duties set forth elsewhere in this article and in other articles 21
of the Code, the Comptroller shall administer the laws that relate to: 22

(1) the admissions and amusement tax; 23

(2) the boxing and wrestling tax; 24

(3) the digital advertising gross revenues tax; 25

(4) THE DIGITAL SOCIAL MEDIA GROSS REVENUES TAX; 26

(5) the income tax; 27

HOUSE BILL 468 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 REVEN UES 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 COST ACCOUNT. 12

2–4B–02. 13

AFTER MAKING THE DIST RIBUTION REQUIRED UN DER § 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 THE ME ANINGS 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 ACCOUNTING PRINCIPLES. 26

(C) “ASSESSABLE BASE” MEANS THE ANNUAL GRO SS REVENUES DERIVED 27
FROM DIGITAL SOCIAL MEDIA SERVICES IN THE STATE. 28
6 HOUSE BILL 468

(D) (1) “DIGITAL SOCIAL MEDIA SERVICE” MEANS A SERVICE PROVIDED 1
TO THE PUBLIC THROUGH AN INTERNET WEBSITE OR A MOBILE APPLICATION THAT: 2

(I) INCLUDES FEATURES TH AT ALLOW A USER TO S HARE 3
IMAGES, TEXT, OR VIDEO THROUGH THE INTERNET WITH OTHER U SERS OF THE 4
SERVICE WHOM THE USER HAS MET, IDENTIFIED, OR BECOME AWARE OF THROUGH 5
THE USE OF THE SERVICE; AND 6

(II) HAS MORE THAN 1,000,000 MONTHLY ACTIVE USERS IN THE 7
UNITED STATES OR GENERATES M ORE THAN $500,000,000 IN ANNUAL GROSS 8
REVENUE, ADJUSTED ANNUALLY FOR INFLATION. 9

(2) “DIGITAL SOCIAL MEDIA SERVICE” DOES NOT INCLUDE A SERVICE 10
THAT IS USED PRIMARILY FOR: 11

(I) THE SALE OR PROVISION OF PROFESSIONAL SERVICES; 12

(II) THE SALE OF COMMERCIAL PRODUCTS; OR 13

(III) IF THE SERVICE DOES NOT INCLUDE THE ABIL ITY FOR 14
CONTENT TO BE SENT BY A USER DIRECTLY TO ANOTHER USER, THE PROVISION OF 15
NEWS OR INFORMATION. 16

(E) “USER” MEANS AN INDIVIDUAL OR ANY OTHER PERSON WHO ACCESSES 17
A DIGITAL INTERFACE WITH A DEVICE. 18

7.7–102. 19

(A) A TAX IS IMPOSED ON ANNUAL GROSS REVENUES OF A PERSON DERIVED 20
FROM DIGITAL SOCIAL MEDIA SERVICES IN THE STATE. 21

(B) (1) FOR PURPOSES OF THIS TITLE, THE PART OF THE ANNUAL GROSS 22
REVENUES OF A PERSON DERIVED FROM DIGITAL SOCIAL MEDIA SERVICES IN THE 23
STATE SHALL BE DETERMINED USING AN APPORTIONMENT FRACTION: 24

(I) THE NUMERATOR OF WHI CH IS THE ANNUAL GRO SS 25
REVENUES OF A PERSON DERIVED FROM DIGITAL SOCIAL MEDIA SERVICES IN THE 26
STATE; AND 27

(II) THE DENOMINATOR OF W HICH IS THE ANNUAL GROSS 28
REVENUES OF A PERSON DERIVED FROM DIGITAL SOCIAL MEDIA SERVICES IN THE 29
UNITED STATES. 30
HOUSE BILL 468 7

(2) THE COMPTROLLER SHALL ADO PT REGULATIONS THAT 1
DETERMINE THE STATE FROM WHICH REVENUES FROM DIGITAL SOCIAL MEDIA 2
SERVICES ARE DERIVED. 3

7.7–103. 4

THE DIGITAL SOCIAL MEDIA GROSS REVENUES TAX RATE IS: 5

(1) 5% OF THE ASSESSABLE BA SE FOR A PERSON WITH GLOBAL 6
ANNUAL GROSS REVENUES OF $500,000,000 THROUGH $1,000,000,000; 7

(2) 7.5% OF THE ASSESSABLE BA SE FOR A PERSON WITH GLOBAL 8
ANNUAL GROSS REVENUES OF $1,000,000,001 THROUGH $10,000,000,000; AND 9

(3) 10% OF THE ASSESSABLE BA SE FOR A PERSON WITH GLOBAL 10
ANNUAL GROSS REVENUES EXCEEDING $10,000,000,000. 11

SUBTITLE 2. RETURNS. 12

7.7–201. 13

(A) EACH PERSON THAT , IN A CALENDAR YEAR , HAS ANNUAL GROSS 14
REVENUES DERIVED FROM DIGITAL SOC IAL MEDIA SERVICES I N THE STATE OF AT 15
LEAST $1,000,000 SHALL COMPLETE , UNDER OATH , AND FILE WITH THE 16
COMPTROLLER A RETURN, ON OR BEFORE APRIL 15 OF THE NEXT YEAR. 17

(B) (1) EACH PERSON THAT REAS ONABLY EXPECTS THE P ERSON’S 18
ANNUAL GROSS REVENUES DERIVED FROM DIGITAL SOCIAL MEDIA SERVICES IN THE 19
STATE TO EXCEED $1,000,000 SHALL COMPLETE, UNDER OATH, AND FILE WITH THE 20
COMPTROLLER A DECLARATION OF ESTIMATED TA X, ON OR BEFORE APRIL 15 OF 21
THAT YEAR. 22

(2) A PERSON REQUIRED UNDE R PARAGRAPH (1) OF THIS 23
SUBSECTION TO FILE A DECLARATION OF ESTIM ATED TAX FOR A TAXAB LE YEAR 24
SHALL COMPLETE AND F ILE WITH THE COMPTROLLER A QUARTER LY ESTIMATED 25
TAX RETURN ON OR BEFORE JUNE 15, SEPTEMBER 15, AND DECEMBER 15 OF THAT 26
YEAR. 27

(C) A PERSON REQUIRED TO F ILE A R ETURN UNDER THIS SEC TION SHALL 28
FILE WITH THE RETURN AN ATTACHMENT THAT S TATES ANY INFORMATIO N THAT 29
THE COMPTROLLER REQUIRES TO DETERMINE ANNUAL GROSS REVENUES DERIVED 30
FROM DIGITAL SOCIAL MEDIA SERVICES IN THE STATE. 31
8 HOUSE BILL 468

7.7–202. 1

A PERSON REQUIRED TO FILE A RETURN UNDER § 7.7–201 OF THIS SUBTITLE 2
SHALL MAINTAIN RECORDS OF DIGITAL SOCIAL MEDIA SERVICES PROVIDED IN THE 3
STATE AND THE BASIS F OR THE CALCULATION O F THE DIGITAL SOCIAL MEDIA 4
GROSS REVENUES TAX OWED. 5

SUBTITLE 3. TAX PAYMENT. 6

7.7–301. 7

(A) EXCEPT AS PROVIDED IN SUBSECTION (B) OF THIS SECTION, A PERSON 8
REQUIRED TO FILE A R ETURN UNDER § 7.7–201 OF THIS TITLE SHALL PAY THE 9
DIGITAL SOCIAL MEDIA GROSS REVENUES TAX WITH THE RETURN THAT COVERS THE 10
PERIOD FOR WHICH THE TAX IS DUE. 11

(B) A PERSON REQUIRED TO FILE ESTIMATED DIGIT AL SOCIAL MEDIA 12
GROSS REVENUES TAX RETURNS UNDER § 7.7–201(B) OF THIS TITLE SHALL PAY: 13

(1) AT LEAST 25% OF THE ESTIMATED DIGITAL SOCIAL MEDIA GROSS 14
REVENUES TAX SHOWN O N THE DECLARATION OR AMENDED DECLARATION FOR A 15
TAXABLE YEAR: 16

(I) WITH THE DECLARATION OR AMENDED DECLARATION THAT 17
COVERS THE YEAR; AND 18

(II) WITH EACH QUARTERLY RETURN FOR THAT YEAR; AND 19

(2) ANY UNPAID DIGITAL S OCIAL MEDIA GROSS RE VENUES TAX FOR 20
THE YEAR SHOWN ON TH E PERSON’S RETURN THAT COVERS THAT YEAR WITH THE 21
RETURN. 22

13–201. 23

In this subtitle, “tax information” means: 24

(4) any information contained in: 25

(i) an admissions and amusement tax return; 26

(ii) an alcoholic beverage tax return; 27

(iii) a bay restoration fee return; 28
HOUSE BILL 468 9

(iv) a boxing and wrestling tax return; 1

(v) a digital advertising gross revenues tax return; 2

(VI) A DIGITAL SOCIAL MEDIA GROSS REVENUES TAX RETURN; 3

[(vi)] (VII) an E–9–1–1 fee return; 4

[(vii)] (VIII) a financial institution franchise tax return; 5

[(viii)] (IX) an inheritance tax return; 6

[(ix)] (X) a Maryland estate tax return; 7

[(x)] (XI) a motor carrier tax return; 8

[(xi)] (XII) a motor fuel tax return; 9

[(xii)] (XIII) a new tire fee return; 10

[(xiii)] (XIV) an other tobacco products tax return; 11

[(xiv)] (XV) a public service company franchise tax return; 12

[(xv)] (XVI) a sales and use tax return; 13

[(xvi)] (XVII) a savings and loan association franchise tax return; 14

[(xvii)] (XVIII) a tire recycling fee return; 15

[(xviii)] (XIX) a tobacco tax return; or 16

[(xix)] (XX) 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 468

(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 MEDIA GROSS REVENUES TAX: 5

(I) ESTIMATE GROSS REVENUES FROM THE BEST 6
INFORMATION IN POSSESSION OF THE TAX COLLECTOR; 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 c ollector 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

HOUSE BILL 468 11

(2) estimates a tax that is: 1

(i) less than 90% of the tax required to be shown on the return for 2
the current taxable year; and 3

(ii) less than 110% of the tax paid for the prior taxable year, reduced 4
by the credit allowed under § 10–703 of this article. 5

13–1001. 6

(H) A PERSON WHO IS REQUIRED TO FILE A DIGITAL SOCIAL MEDIA GROSS 7
REVENUES TAX RETURN AND WHO WILLFULLY FA ILS TO FILE THE RETU RN AS 8
REQUIRED UNDER TITLE 7.7 OF THIS ARTICLE IS GUILTY OF A MISDEMEANOR AND, 9
ON CONVICTION, IS SUBJECT TO A FINE NOT EXCEEDING $5,000 OR IMPRISONMENT 10
NOT EXCEEDING 5 YEARS OR BOTH. 11

13–1002. 12

(b) A person, including an officer of a corporation, who willfully files a false digital 13
advertising gross revenues tax return, A FALSE DIGITAL SOCI AL MEDIA GROSS 14
REVENUES TAX RETURN, a false financial institution franchise tax return, a false public 15
service company franchise tax return, or a false income tax return with the intent to evade 16
the payment of tax due under this article is guilty of perjury and, on conviction, is subject 17
to the penalty for perjury. 18

(c) Subsections (a) and (b) of this sect ion apply to the alcoholic beverage, digital 19
advertising gross revenues, DIGITAL SOCIAL MEDIA GROSS REVENUES , financial 20
institution franchise, public service company franchise, and income taxes. 21

13–1101. 22

(b) An assessment of digital advertising gross re venues tax, DIGITAL SOCIAL 23
MEDIA GROSS REVENUES TAX, financial institution franchise tax, public service company 24
franchise tax, income tax, or estate tax may be made at any time if: 25

(1) a false return is filed with the intent to evade the tax; 26

(2) a willful attempt is made to evade the tax; 27

(3) a return is not filed as required under Title 7, Title 7.5, TITLE 7.7, Title 28
8, or Title 10 of this article; 29

(4) an amended estate tax return is not filed as required under Title 7 of 30
this article; 31

(5) an incomplete return is filed; or 32
12 HOUSE BILL 468

(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, 2028. 9

SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect July 10
1, 2028. 11