Online Sales Taxes
Some tech policy issues are perennial entries on lists such as this one — the subjects of persistent debate that never seem to come to resolution. The question of whether and how to collect sales taxes on Internet purchases is certainly in that category. As a starting point, it's important to note that the debate is not about whether to create a new tax.
Shoppers who live in states with a sales tax are supposed to report their online purchases on their annual return, tallying up the taxes that are due but weren't collected at the time of the sale. Most people do not. So states have complained that billions of dollars in revenue that is owed goes uncollected each year, and some have been trying to force out-of-state ecommerce vendors like Amazon to collect and remit the taxes.
But the U.S. Supreme has ruled that merchants must have a physical presence in a state before they can be compelled to collect taxes there, though the court acknowledged Congress could change that condition with a new law.
In May, the Senate approved the Marketplace Fairness Act, which would grant states the taxing authority, provided they took steps to simplify their state and local codes to ease the burden for retailers. The bill also contains an exemption for small sellers. But that's where the issue ended, at least in 2013. The chairman of the House Judiciary Committee, Virginia Republican Bob Goodlatte, responded to the passage of the Senate bill with a statement saying that the legislation needs to be further simplified and its terms clarified, adding that his committee would consider alternative measures.
Then in December, the Supreme Court declined to hear an appeal of a lower court's ruling that rejected the challenge brought by Amazon and Overstock.com against a New York law that deemed affiliates of the retailers sufficient to constitute the physical presence that would trigger the sales tax requirement. The high court's refusal to hear the case means that it will be up to Congress — and Congress alone — to move the online sales tax issue forward.
Can the Feds Regulate Broadband?
The authority of the Federal Communications Commission to police broadband Internet service providers remained an unsettled question at the end of the year. Two opposing sides made their case in a federal appellate court in September, with a ruling expected in 2014.
At issue is the substance of the FCC's 2010 open Internet order, which barred ISPs from blocking or slowing lawful Internet transmissions. But more broadly, the lawsuit, brought by Verizon, stands as a challenge to the FCC's authority to regulate broadband providers. At the oral arguments in September, the judges seemed skeptical of the agency's statutory mandate in that area.
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