OVERNIGHT TECH: House panel to weigh online sales tax options

THE LEDE: The House Judiciary Committee will hear proposals Wednesday for a system that would allow states to collect a sales tax on purchases made from out-of-state retailers. Currently, a state can only collect a sales tax from residents’ online purchases made from retailers with a physical presence in that state. 

Tax lawyers will testify at a committee hearing Wednesday, presenting alternative solutions to the cross-state online sales tax system set up by the Marketplace Fairness Act, which passed the Senate last year. House Judiciary Committee Chairman Bob Goodlatte (R-Va.) last year released a set of seven principles that would need to be met by any online sales tax bill in front of his committee. Those principles include protecting consumer privacy, simplicity and “tech neutrality,” meaning any online sales tax bill should not impose additional or fewer compliance burdens on online retailers.

Goodlatte said in a statement that he looks forward to hearing the witnesses proposals.

“While this is not a new conversation, the process that the Committee takes today is unprecedented,” he said. “Fresh alternatives on the remote sales tax issue are needed, and on Wednesday we will hear about new ideas from a panel of witnesses.”

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Proposals to be floated to the committee include a congressional framework for states to streamline their tax codes for online sellers and an “origin-based” system in which the tax rates and compliance burdens are based on the location of the retailer rather than the customer.

Tech trade groups came out ahead of the hearing with statements encouraging Goodlatte to seriously consider any compliance burdens new tax legislation would impose on online businesses.

Ed Black, CEO of the Computer and Communications Industry Association, which includes Google, eBay, Yahoo and Facebook, said his group is “encouraged that Chairman Goodlatte sees the need to consider alternatives to the highly problematic approach taken by the Senate’s Marketplace Fairness Act” and looks forward to a discussion about Goodlatte’s principles.

“Any Internet sales tax collection scheme that dumps an excessive compliance burden on small Internet retailers by pressing them into service as tax collectors for thousands of jurisdictions needs to be discarded,” he said, adding that “small Internet retailers must not be penalized for their innovation.”

Linda Moore, CEO of TechNet, a policy advocacy group made up of tech executives, said that Goodlatte’s principles “remind us that we need to look at the rights of individuals affected, the cost of compliance for technology-enabled businesses, and the need to simplify — not complicate — any system that will have to work across multiple local, state and national tax jurisdictions.”

Satellite TV bill to come under scrutiny: A House Energy and Commerce subcommittee will take a look at reauthorizing the law allowing satellite companies to beam broadcast channels to some rural viewers in a hearing on Wednesday. The must-pass law is likely to attract a host of other provisions to overhaul regulations for the TV industry.

Communications subcommittee Chairman Greg Walden (R-Ore.) unveiled a draft law last week that would reauthorize the Satellite Television Extension and Localism Act (STELA) for another five years. It would also end a requirement that both rented and store-bought set-top boxes contain an unscrambling device, a move that would have the greatest effect on companies like TiVo, among other changes.

In his prepared testimony, TiVo senior vice president Matthew Zinn said the provision “is not the answer and would deprive consumers of the limited choice they have today.”

Other players in the TV industry, including broadcasters and cable and satellite companies, have all backed Walden’s bill, and will reiterate their support on Wednesday.

Matt Wood, policy director at the consumer interest group Free Press, on the other hand will attack a portion of the draft bill that seems to prevent the Federal Communications Commission (FCC) from imposing new rules on broadcasters’ ability to jointly negotiate. Collusion, he said in his prepared testimony, “is a serious problem because it deprives people of news and information about their government, their communities, and their culture.”

“The prospect of consolidated control over two, three or more television stations per market should concern anyone who cares about representative democracy, and about the civic discourse and debate required to keep that democracy alive.”

Think tank head claims cable trying to kill broadcasters: Cable and satellite companies want to kill off free broadcast television, according to the head of the Center for Boundless Innovation in Technology, a group fighting government regulation online. In an op-ed for The Hill on Tuesday, Fred Campbell wrote that a bill to reauthorize STELA should not become ground zero for fights over the retransmission agreements that allow cable and satellite companies to show broadcast channels.

“Irrespective of the Free TV model’s merits, a policy change of this magnitude should be debated transparently and comprehensively, not rushed through STELA wearing a false ‘market failure’ masque,” he wrote. “The Communications Act update would provide an appropriate legislative vehicle for that consideration. STELA reauthorization does not.”

Heller calls for Senate to follow House on FCC reform: The Senate needs to take up Rep. Greg Walden’s (R-Ore.) bill to reform the FCC, Sen. Dean Heller (R-Nev.) said after the lower chamber easily passed the measure late on Tuesday.

“As of now, the administration and the House of Representatives have weighed in on the issue of process reform,” Heller, a member of the Senate Commerce Committee, said in a statement. “I urge my colleagues on the Committee to build on the growing momentum for this bill, and act quickly to consider it in Committee.”

National Journal president heads to SoftBank: The president of National Journal is heading to the Japanese telecom giant SoftBank. Bruce Gottlieb will join the company’s U.S. subsidiary as executive vice president for legal and regulator affairs.

Before running the Washington publication, Gottlieb was chief counsel at the FCC and worked for President Obama’s 2008 transition team.

 

ON TAP

The House Judiciary Committee’s hearing on an online sales tax gets underway at 10:00 a.m.

The Energy and Commerce subcommittee hearing on STELA starts just 30 minutes later.

At noon, Sens. Jeff Flake (R-Ariz.), Chris Coons (D-Del.) and Intel’s CEO will talk about conflict minerals in an event on Capitol Hill.

The House Small Business Committee will hold a hearing on “opportunities for entrepreneurs” to take advantage of 3D printers in the afternoon.

At 2:00 p.m., Homeland Security Secretary Jeh Johnson is testifying before the Senate Appropriations Committee on his department’s annual budget.

Gen. Keith Alexander, the head of the National Security Agency, is testifying before the House Armed Services Committee at 3:30 p.m.

Microsoft co-founder Bill Gates will be interviewed in an event hosted by The Atlantic in the evening.

 

IN CASE YOU MISSED IT

A top House Republican fears the FCC isn't done with news media studies that are out of bounds. 

President Obama’s pick to lead the National Security Agency pledged on Tuesday to protect privacy rights while at the helm of the spy agency. 

Masayoshi Son, CEO of SoftBank and chairman of Sprint, thinks the U.S. needs to fix its wireless market. 

The House voted to require the FCC to operate more transparently, including by ensuring public input on regulations. 

Lawmakers on the Senate Intelligence Committee are getting “very close” to a new cybersecurity bill, according to the panel's top Republican. 

Security expert and surveillance critic Alex Stamos is Yahoo's new vice president of information security. 

 

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