Comcast Unit Brings Early Challenge to Washington Digital Ad Tax

A Comcast Corp. subsidiary is challenging Washington state’s new application of sales tax to digital advertising, a move that was expected to draw litigation.

Applying sales tax to digital advertising violates the federal Internet Tax Freedom Act because most forms of offline advertising aren’t covered by the state law, the company told the Washington Superior Court, Thurston County. ITFA, passed in the 1990s to protect fledgling online commerce, bars states from imposing “discriminatory taxes” on electronic commerce when there isn’t a tax on their analog counterparts.

Taxpayer advocates have had Washington’s tax in their sights since it was passed in ...