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Innovation

California State Assembly Passes Online Sales Tax Bill

WASHINGTON June 7, 2011- The California State Assembly passed a bill last week that would require online retailers such as Amazon to collect state sales taxes on all goods the site sells within the state.

The bill is similar to those that a number of other states and the U.S. Congress are currently debating.

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WASHINGTON June 7, 2011- The California State Assembly passed a bill last week that would require online retailers such as Amazon to collect state sales taxes on all goods the site sells within the state.

The bill is similar to those that a number of other states and the U.S. Congress are currently debating.

“Each year, California loses over $1.145 billion in revenues as a result of unreported use taxes.  A large percentage of this use tax gap is attributable to out-of-state Internet sales,” said Assemblyman Charles Calderon, the author of the bill.  “More importantly, the lack of use tax collection has provided a competitive advantage to many out-of-state companies, allowing them to undercut their in-state competitors.”

The bill passed the lower house of the California legislature by a 47-16 vote and will now move the state Senate.

The California State Board of Equalization, which administers and collects sales tax, estimated that on average each household owes $61 in taxes for online sales that are not collected. Collecting taxes on Amazon sales alone would generate $83 million in revenue for the state.

“[The bill] would help to level the playing field by imposing a use tax collection obligation on retailers that use in-state sister companies to help develop or sell their goods,” Calderon said.

South Dakota, Missouri, Nevada and Connecticut are all also currently investigating collecting sales taxes from online retailers.

Illinois passed a similar piece of legislation in April, which the state estimated would generate $170 million in revenue.

After the Comptroller of Public Accounts in Texas asked Amazon to pay $269 million in uncollected sales taxes, the online retailer closed its distribution facility in Irving, Texas in February.

When the North Carolina legislature passed a law last October requiring Amazon to collect sales taxes for goods sold through its North Carolina-based affiliates, the retailer shut the affiliates program down in that state. The program allows small businesses to sell goods on the Amazon site.

New York passed a piece of legislation similar to the North Carolina law in 2008.  Amazon is currently challenging both the New York and North Carolina laws in state courts.

In May, Rep. Lamar Smith (R-TX) proposed the Digital Goods and Services Tax Fairness Act of 2011, which would create a simplified way in which digital goods and services could be taxed. Sen. Dick Durbin (D-IL) is also working on an online sales tax bill.

Rahul Gaitonde has been writing for BroadbandBreakfast.com since the fall of 2009, and in May of 2010 he became Deputy Editor. He was a fellow at George Mason University’s Long Term Governance Project, a researcher at the International Center for Applied Studies in Information Technology and worked at the National Telecommunications and Information Administration. He holds a Masters of Public Policy from George Mason University, where his research focused on the economic and social benefits of broadband expansion. He has written extensively about Universal Service Fund reform, the Broadband Technology Opportunities Program and the Broadband Data Improvement Act

Drones

Amazon Asks FCC to Allow Drones in 60-64 GHz Band in Preparation For New Delivery Service

Limited customer-facing operations are scheduled to begin this year for Amazon’s drone delivery service.

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Photo of Jaime Hjort, Amazon's head of wireless and spectrum policy

WASHINGTON, November 23, 2022 – Amazon on Friday continued its campaign to persuade the Federal Communications Commission to allow near–ground level drones to utilize the 60–64 GigaHertz band, a move the company said would make drone operations safer.

Amazon has long developed Amazon Prime Air, its drone-based delivery service. Then-CEO Jeff Bezos made a dramatic TV reveal in 2013, and limited customer-facing operations are scheduled to begin this year.

Allowing radar applications in this band would improve “a drone’s ability to sense and avoid persons and obstacles in and near its path without causing harmful interference to other spectrum users,” argued Friday’s letter, signed by Jaime Hjort, head of wireless and spectrum policy, and Kristine Hackman, senior manager of public policy.

In an October filing, cited in Friday’s letter, Amazon laid out its case more fully, stating that the proposed drone activity in the band would not clash with the existing operations of earth-exploration satellite services.

The company urged the commission to adopt a new perspective on drones, a novel technology: “A drone package delivery operating near ground level operates much more like a last-mile delivery truck than a cargo plane,” the October filing read.

Spectrum allocation is a top priority for lawmakers and experts, alike. Many believe increased spectrum access is vital to the development of next-generation 5G and 6G technologies as well as general American economic success.

In August, the FCC and National Telecommunications and Information Administration – overseers of non-federal and federal spectrum, respectively – announced an updated memorandum of understanding to better coordinate Washington’s spectrum policy. In September, the FCC announced the winners of the 2.5 GHz auction and approved a notice seeking comment on the 12.7–13.25 GHz band the next month.

A senior NTIA official in October stated his agency would create “spectrum strategy” that will rely heavily on public input.

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Innovation

Semiconductor Export Restrictions Could Harm U.S. Companies, Industry Says

The United States acted unilaterally, and its allies are not yet ‘on board,’ said the Semiconductor Industry Association.

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Photo of Jimmy Goodrich, vice president of global policy at the Semiconductor Industry Association

WASHINGTON, November 4, 2022 – The Department of Commerce’s recent export restrictions on semiconductors will make American companies less competitive in global markets unless U.S. allies agree to abide by similar measures, Jimmy Goodrich, vice president of global policy at the Semiconductor Industry Association, at a web panel Friday.

In October, Commerce prohibited the exportation to China of certain high-functioning chips necessary for supercomputers and moved to prevent other countries from providing China with certain semiconductors made with American technology.

The Commerce Department also limited American citizens’ ability to work with Chinese chip facilities. The restrictions were billed as a national security imperative and designed to limit the development next-generation, chip-dependent Chinese military technology.

However, the United States acted unilaterally, and her allies are not yet “on board,” Goodrich said.

Until allies opt into similar restrictions, the department’s new rules will “encourage the de-Americanization of [intellectual property] and supply chains,” Goodrich said. “If you’re a multinational company, you’re thinking about developing your intellectual property, where are you going to do it? Probably not the United States at this point.”

“You’re going to look to Singapore, Malaysia, India, Australia, where you may not face that type of regulatory environment,” he added.

China is a huge market for the American chip industry and related businesses, and based on the new restrictions, some firms are predicting revenue declines of $1 billion to $2.5 billion, Goodrich said.

“[The challenge] is balancing a national security with the economic security piece,” stated Paul Triolo, senior vice president for China and technology policy lead at the Albright Stonebridge Group. “There hasn’t really been a significant discussion of how China fits into [global] supply chains and under what conditions.”

Commerce added the export restrictions just two months after President Joe Biden signed into law the CHIPS and Science Act, which allocated $52.7 billion for domestic semiconductor research, development, manufacturing, and workforce development. Since CHIPS, Intel and others have announced or broken ground on several chip factories in the United States.

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Artificial Intelligence

AI Should Compliment and Not Replace Humans, Says Stanford Expert

AI that strictly imitates human behavior can make workers superfluous and concentrate power in the hands of employers.

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Photo of Erik Brynjolfsson, director of the Stanford Digital Economy Lab, in January 2017 by Sandra Blaser used with permission

WASHINGTON, November 4, 2022 – Artificial intelligence should be developed primarily to augment the performance of, not replace, humans, said Erik Brynjolfsson, director of the Stanford Digital Economy Lab, at a Wednesday web event hosted by the Brookings Institution.

AI that complements human efforts can increase wages by driving up worker productivity, Brynjolfsson argued. AI that strictly imitates human behavior, he said, can make workers superfluous – thereby lowering the demand for workers and concentrating economic and political power in the hands of employers – in this case the owners of the AI.

“Complementarity (AI) implies that people remain indispensable for value creation and retain bargaining power in labor markets and in political decision-making,” he wrote in an essay earlier this year.

What’s more, designing AI to mimic existing human behaviors limits innovation, Brynjolfsson argued Wednesday.

“If you are simply taking what’s already being done and using a machine to replace what the human’s doing, that puts an upper bound on how good you can get,” he said. “The bigger value comes from creating an entirely new thing that never existed before.”

Brynjolfsson argued that AI should be crafted to reflect desired societal outcomes. “The tools we have now are more powerful than any we had before, which almost by definition means we have more power to change the world, to shape the world in different ways,” he said.

The AI Bill of Rights

In October, the White House released a blueprint for an “AI Bill of Rights.” The document condemned algorithmic discrimination on the basis of race, sex, religion, or age and emphasized the importance of user privacy. It also endorsed system transparency with users and suggested the use of human alternatives to AI when feasible.

To fully align with the blueprint’s standards, Russell Wald, policy director for Stanford’s Institute for Human-Centered Artificial Intelligence, argued at a recent Brookings event that the nation must develop a larger AI workforce.

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