Senate Bill 904 proposes Maryland data broker registry and tax to bolster privacy enforcement

On March 5, 2025, the Maryland General Assembly's Budget and Taxation Committee convened to discuss significant legislative proposals, notably Senate Bill 904, which aims to establish a data broker registry and impose a tax on data broker profits. This bill is a response to growing concerns about consumer privacy and the lack of accountability in the data brokerage industry.

Senator Katie Fry Hester presented the bill, emphasizing the need for transparency and consumer protection in an era where personal data is routinely collected and sold without individuals' consent. The proposed legislation would require data brokers to register with the state and disclose their data practices, while also imposing a 6% tax on their profits. This tax could potentially generate substantial revenue for Maryland, estimated at over $700 million annually, which would fund critical state programs, including consumer protection and digital literacy initiatives.

The Attorney General of Maryland supported the bill, highlighting the current inadequacy of resources dedicated to enforcing privacy laws. With only one attorney focused on privacy enforcement, the Attorney General argued that the proposed tax would provide necessary funding to protect Marylanders' personal information from misuse.

However, the bill faced significant opposition from various stakeholders, including the Maryland Retailers Alliance and the Maryland Chamber of Commerce. Critics argued that the bill's broad definition of data brokers could encompass nearly all businesses, imposing an unfair tax burden and administrative challenges. They expressed concerns that the legislation could stifle competition and innovation, particularly for small businesses that rely on data for essential operations like fraud protection.

The committee also heard testimonies from privacy advocates who stressed the importance of regulating data brokers to prevent potential harms associated with data misuse, including identity theft and discrimination. They urged the committee to consider amendments that would refine the definition of data brokers to focus on larger entities that do not have direct relationships with consumers.

As the committee deliberates on Senate Bill 904, the discussions reflect a broader national conversation about data privacy and the responsibilities of companies that profit from personal information. The outcome of this bill could set a precedent for how states regulate data brokers and protect consumer rights in the digital age. The committee is expected to continue its discussions and consider amendments before making a final decision on the legislation.