Legislation aimed at streamlining sales taxes on digital downloads such as e-books and music files is facing opposition from states and localities that fear the bill will reduce their revenue, according to a report from CQ's Ambreen Ali. The legislation (HR 1860), from House Judiciary Chairman Lamar Smith, R-Texas, would clarify that states can only collect taxes on digital downloads from customers who live within their boundaries, and prevent taxes on downloads from exceeding taxes on in-store purchases. The legislation is scheduled for a markup this summer, despite opposition from groups including the National Governors Association and National League of Cities, which claim the bill is a solution in search of a problem.
Critics are correct that online retailers are taxed unevenly at present, due in part to a lack of clarity over when states have the authority to demand sales taxes from online purchases. Instead of opposing the bill, the National Conference of State Legislatures called on Congress to first pass separate bills (S 1832, HR 3179) that would ensure states can collect taxes on digital sales. But the wireless companies are pushing for the passage of Smith's bill, arguing it would boost online commerce by streamlining the rules. Smith's dogged support for SOPA and PIPA, even in the face of the growing online backlash, earned him the ire of the tech community earlier this year. But it also showed he is not a man that bows to pressure easily. Expect the legislation to move forward later this summer.
Lawmakers Question Facebook on Tracking Kids: Two of Congress' top privacy hawks wrote to Facebook on Monday following reports that the social networking giant is considering allowing children 12 and younger to use its service. Reps. Edward J. Markey, D-Mass., and Joe L. Barton, R-Texas, sent a letter (PDF) to Facebook CEO Mark Zuckerberg noting that the changes would subject the company to laws protecting children's privacy online and asking what information the site plans to collect from those users. They also express "deep concern" that the changes could negatively affect children and state their strong belief "that children and their personal information should not be viewed as a source of revenue." Quotable: “More than 5 million pre-teens have managed to sign up for Facebook accounts. While we are glad that Facebook is seeking to address this problem, the company needs to ensure that it creates a safe, child-friendly space on the site, one that is fundamentally different from the space available to teens and adults. Facebook has to provide parents with effective tools to monitor and supervise their pre-teens' activities. Plus, it shouldn't collect information about these children for ads and marketing. If Facebook is serious about making the site a safer place for kids, it has to deliver stronger controls and education aimed at parents, and they shouldn’t target kids with ads." — Consumers Union regulatory counsel Ioana Rusu Copyright Office Holds Hearing on Jailbreaking: The U.S. Copyright Office is continuing its series of hearings today on jailbreaking, or working around the copyright protections built into certain devices and forms of media such as DVDs, smartphones and video game consoles. The Thomas Jefferson Building of the Library of Congress will play host to the all-day session, which will feature a number of demonstrations of computer programs that allow users to install lawfully obtained software on devices that are normally incompatible with said programs. Proponents argue that jailbreaking allows consumers to install useful apps on their devices even if the programs are designed for a different platform. There will also be two panel discussions featuring groups both for and against specific, proposed exemptions to the ban on jailbreaking. A representative for the Business Software Alliance, which opposes some of the proposed exemptions, said the restrictions are necessary to protect platforms and argued consumers already have access to a vast range of mobile apps. NASA Nets Two Free Telescopes: The secretive National Reconnaissance Office made waves on Monday by gifting two unused spy telescopes on par with the Hubble Space Telescope to NASA. The windfall is a boost for NASA, which has struggled to complete Hubble's successor, the James Webb Space Telescope, under budgetary constraints. The Webb telescope is still at least six years away from launch. NASA's two new telescopes are space-qualified and possess superior technology to the Hubble, but they are unlikely to be launched in the near future. They will remain in storage while NASA figures out what to do with them. The telescopes were originally used for intelligence collection, a reminder that the military and intelligence community possess space technology that meets or exceeds what is available at NASA. The Economist on Amtrak: The Economist's Gulliver travel blog tackles widespread complaints about the quality of WiFi access on Amtrak, particularly galling in light of the company's widespread marketing campaign touting the feature. Gulliver says the increasing adoption of wireless broadband modems should ease the congestion before Amtrak gets around to fixing its network. If only there were a similar solution for frequent train delays. Gulliver also notes that California's ambitious high-speed rail plans are in danger of stalling, thanks to partisan gridlock and rising opposition from stakeholders with vested interests, such as airlines and freight transporters. A failure to move forward in the Golden State would be a major setback for advocates of high-speed rail, including the Obama administration.