From the “Eternal Vigilance” department comes a report called, “iAWFUL (The Internet Advocates’ Watchlist for Ugly Laws).” Released by the Internet commerce group Netchoice (www.netchoice.org), the report is a Top Ten list of ridiculous laws that have been proposed by clueless legislators.
Oklahoma has not been untouched by goofy laws proposed to regulate the Internet. You may recall in April, 2006 when our state lawmakers proposed a law that would have actually legalized spyware (see my article titled, “State House bill legalizes spyware). Fortunately, that bill went nowhere.
“The Internet is increasingly under attack as lawmakers seek to mandate technological behaviors, impose new taxes and otherwise restrict the free flow of information and commerce online,” said Steve DelBianco, Executive Director of NetChoice.
Topping the iAWFUL list is a law from Maine that requires Web sites to obtain “verifiable parental consent” before collecting personal information from teens. Lawmakers approved the measure despite the fact that Web sites have no means to confirm such consent, and would be effectively forced to stop providing valuable services like college information, test prep services, and class rings.
Politicians seem to be on a never-ending quest to transfer more of your money into someone else’s pocket, as demonstrated by newly-proposed Internet taxation laws. Taking the iAWFUL list’s number two spot is a New York City ordinance that would slam Internet users with an extra tax on hotel rooms. Scheduled to take effect in September, the new tax is aimed squarely at consumers who use the Internet to bargain hunt for expensive NYC hotel rooms. New York, like many cities, wants to impose its double-digit “occupancy tax” on the service fees added by online travel companies.
Also mentioned is ruling from the Colorado Department of Revenue that would impose a sales tax on any service or subscription where users can download or print documents or web pages. Services aren’t taxed in Colorado, but this ruling makes them taxable if the service is provided online. Just emailing a document to a customer would make an otherwise nontaxable service into a taxable digital good.
In addition, the Washington Department of Revenue issued a draft rule that taxes all digital products, regardless of how they are accessed (downloaded, streamed, subscription service, networking, etc.). Washington broadly defines “digital good” to encompass a variety of things, even digital schematics of a lawnmower transferred electronically to a repair shop. What’s more troubling is that the ruling suggests that payments for displaying online advertising would suddenly become a taxable event.
Not to be outdone, North Carolina has proposed a law, SB 99, that is actually violates federal law right off the bat. SB 99 violates federal law because it explicitly targets Internet—and only Internet—ticket sales. It doesn’t take a big-city lawyer to see that the proposed law would violate The Internet Tax Freedom Act Amendment Acts of 2007 (Public Law No: 110-108), which provides a moratorium through November 1, 2014 on any “multiple or discriminatory taxes on electronic commerce.” This law bars federal, state and local governments from imposing discriminatory Internet-only taxes such as bit taxes, bandwidth taxes, and email taxes. It also prohibits the sort of prima facie discrimination exhibited by SB 99—”Reselling or offering to resell admission tickets on the Internet…”
With our wallets and Internet freedoms under constant assault, I believe that watchdog groups like Netchoice do a good work. Give them your support.