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Senate wants to tax your online shopping and Netflix-binge habits #InternetFreedomAct

The intent of the Internet-related legislation is to keep states from enacting new taxes on Internet access. However, the Senate is proposing an Act that would give states the option to tax “remote businesses” i.e. online retailers selling within states’ borders.

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Keeping states from enacting Internet taxes

The inclusion of the Internet Tax Freedom Act (ITFA) in the Trade Facilitation and Trade Enforcement Act of 2015 had shown some promise when we reported on this critical moratorium a few weeks ago. The intent of the Internet-related legislation is to keep states from enacting new taxes on Internet access.

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However, the Senate removed the supporting language from the trade bill and included it instead in the omnibus spending package that passed both the House and Senate on December 18, 2015.

Senate proposing tax for online retailers

The moratorium on new taxes for Internet access has been extended until October 2016. While the White House has shown support for the legislation, through the President’s repeated statements in support of net neutrality, it’s the Senate that is prolonging the stopgap. Specifically, U.S. Senator Lamar Alexander (R – Tenn.), who also wants a vote on the Marketplace Fairness Act, of which he is the lead co-sponsor.

The Act would give states the option to tax “remote businesses” i.e. online retailers selling within states’ borders.

Interestingly enough, the White House has been in favor of Alexander’s legislation, with an endorsement via former White House press secretary Jay Carney as reported by The Hill in this 2013 article. Carney spoke then on “the need for federal legislation to level the playing field for our businesses and address sales tax fairness.”

Leveling the playing field

The debate stems from the impact to various parties from consumers to retailers. The legislators in support of a remote business tax have stated that the law will create a level playing field for brick and mortar retailers, providing much needed revenue to states in need.

The opposing view believes that consumers will bear the cost through discriminatory taxes at the state and local levels.

Taxing your Netflix-binge habit

The concern about discriminatory taxes seems well-founded with Chicago’s July 1, 2015 creation of the 9% “amusement tax” that affects entertainment both in person and electronic delivery. Charges are required to be paid for the privileges of “watching electronically delivered television shows, movies or video,” as well as “listening to electronically delivered music” and “participating in games, online or otherwise.”

The code states that the amusement tax applies only to rentals, and not “permanent” downloads. This local ordinance mostly impacts streaming online services including iTunes, Netflix and Hulu.

Amazon calls for streaming tax

Interestingly, online sales giant Amazon has long supported this legislation as evidenced by this 2013 article from The Hill, stating that “Amazon argues that a single national framework for tax collection is preferable to a patchwork of state laws.” Amazon’s greatest online rivals including eBay and Overstock who don’t have a physical presence in the number of states that Amazon does.

Amazon has been collecting sales taxes in those states where they have a physical presence, including Illinois as of February 1, 2015, and Michigan on October 1, 2015.

On an intriguing side note, former Obama administration press secretary Jay Carney was hired by Amazon in February of 2015 as senior vice president of global corporate affairs.

His position includes oversight of public policy and public relations.

Streaming tax goes largely unreported in state returns

In states that require state income tax returns, consumers have been required to self-report that tax. According to this Detroit Free Press article, Michigan state officials estimated that “only 2.5% of what was really due” was reported for untaxed online purchases in the 2013 tax returns.

States’ rights vs. Net neutrality

Whether Senator Alexander holds true to his principles of the past or will sacrifice net neutrality for states’ rights will play out over the next ten months. Keep in mind that Alexander stated in these remarks from November 7, 2003, on the Internet Tax Moratorium of  “no taxation of Internet access” and that “virtually all of us are willing to keep state and local governments from taxing Internet access.“

Many economists are skeptical, and even accusing Alexander as well as Senate Democrat whip Dick Durbin of holding the ITFA hostage for the sake of their own agendas. National Review economist Stephen Moore pointed out the hypocrisy of some of Durbin’s statements in his article. “… Now the man who says the Internet should be universally available and affordable hypocritically wants to tax it to make it less affordable. The primary victims, if Senator Durbin’s eleventh-hour tax gambit succeeds, will be poor households…”

Indeed, having access to the Internet has moved well beyond being a luxury to being a convenience for all users, regardless of their income and tax bracket.

#InternetTaxFreedomAct

Debbie Cerda is a seasoned writer and consultant, running Debra Cerda Consulting as well as handling business development at data-driven app development company, Blue Treble Solutions. She's a proud and active member of Austin Film Critics Association and the American Homebrewers Association, and Outreach Director for science fiction film festival, Other Worlds Austin. She has been very involved in the tech scene in Austin for over 15 years, so whether you meet her at Sundance Film Festival, SXSWi, Austin Women in Technology, or BASHH, she'll have a connection or idea to help you achieve business success. At the very least, she can recommend a film to watch and a great local craft beer to drink.

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1 Comment

1 Comment

  1. Anakai

    February 29, 2016 at 7:57 pm

    I guess that Constitution thingy that all those guys like to love on so much suddenly becomes irrelevant when it comes to picking your pocket.

    Section 1, Article 9.5:
    “No tax or duty shall be laid on Articles exported from any State.”

    Reading is evidently not a required skill for electing people to positions of authority that control millions of people.

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Business News

This web platform for cannabis is blowing up online distribution

(BUSINESS NEWS) Dutchie, a website platform for cannabis companies, just octupled in value. Here’s what that means for the online growth of cannabis distribution.

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A small jar of cannabis on a desk with notebooks, sold online in a nicely made jar.

The cannabis industry has, for the most part, blossomed in the past few years, managing to hit only a few major snags along the way. One of those snags is the issue of payment processing, an issue compounded by predominantly cash-only transactions. Dutchie, a Bend, Oregon company, has helped mitigate that issue—and it just raised a ton of money.

Technically, Dutchie is a jack-of-all-trades service that creates and hosts websites for dispensaries, tracks product, processes orders, keeps stock of revenue, and so much more. While it was valued at around $200 million as recently as summer of 2020, a round of series C funding currently puts the company at around $1.7 billion—approximately 8 times its worth a mere 8 months ago.

There are a few reasons behind Dutchie’s newfound momentum. For starters, the pandemic made cannabis products a lot more accessible—and desirable—in states in which the sale of cannabis is legal. The ensuing surge of customers and demand certainly didn’t hurt the platform, especially given that Dutchie is largely responsible for keeping things on track during some of the more chaotic months for dispensaries.

Several states in which the sale of cannabis was illegal also voted to legalize recreational use, giving Dutchie even more stomping ground than they had prior to the lockdown.

Dutchie also recently took on 2 separate companies and their associated employees, effectively doubling their current staff. The companies are Greenbits—a resource planning group—and Leaflogix, which is a point-of-sale platform. With these two additions to their compendium, Dutchie can operate as even more of an all-in-one suite, which absolutely contributes to its value as a company.

Ross Lipson, who is Dutchie’s co-founder and current CEO, is fairly dismissive of investment opportunities for the public at the moment, saying he instead prefers to stay “focused with what’s on our plate” for the time being. However, he also appears open to the possibility of going public via an acquisition company.

“We look at how this decision brings value to the dispensary and the customer,” says Lipson. “If it brings value, we’d embark on that decision.”

For now, Dutchie remains the ipso facto king of cannabis distribution and sales—and they don’t show any plans to slow down any time soon.

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Ford adopts flexible working from home schedule for over 30k employees

(BUSINESS NEWS) Ford Motor Co. is allowing employees to continue working from home even after the pandemic winds down. Is this the beginning of a trend for auto companies?

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Woman in car working on engineering now allowed a flexible schedule for working from home.

The pandemic has greatly transformed our lives. For the most part, learning is being conducted online. At one point, interacting with others was pretty much non-existent. Working in the office shifted significantly to working remotely, and it seems like working from home might not go away anytime soon.

As things slowly get back to a new “normal”, will things change again? Well, one thing is sure. Working from home will be a permanent thing for some people as more companies opt to continue letting people work remotely.

And, the most recent company on the list to do this is Ford Motor Co. Even after the pandemic winds down, Ford will allow more than 30,000 employees already working from home to continue doing so.

Last week, the automaker giant announced its “flexible hybrid model” schedule to its staff. The new schedule is set to start in the summer, and employees can choose to work remotely and come into the office for tasks that require face-to-face collaborations, such as meetings and group projects.

How much time an employee spends in the office will depend on their responsibilities, and flexible remote hours will need to be approved by an employee’s manager.

“The nature of work drives whether or not you can adopt this model. There are certain jobs that are place-dependent — you need to be in the physical space to do the job,” David Dubensky, chairman and chief executive of Ford Land, told the Washington Post. “Having the flexibility to choose how you work is pretty powerful. … It’s up to the employee to have dialogue and discussion with their people leader to determine what works best.”

Ford’s decision to implement a remote-office work model has to do in part with an employee survey conducted in June 2020. Results from the survey showed that 95% of employees wanted a hybrid schedule. Some employees even reported feeling more productive when working from home.

Ford is the first auto company to allow employees to work from home indefinitely, but it might not be the only one. According to the Post, Toyota and General Motors are looking at flexible options of their own.

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Unify your remote team with these important conversations

(BUSINESS NEWS) More than a happy hour, consider having these poignant conversations to bring your remote team together like never before.

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Woman working in office with remote team

Cultivating a team dynamic is difficult enough without everyone’s Zoom feed freezing halfway through “happy” hour. You may not be able to bond over margaritas these days, but there are a few conversations you can have to make your team feel more supported—and more comfortable with communicating.

According to Forbes, the first conversation to have pertains to individual productivity. Ask your employees, quite simply, what their productivity indicators are. Since you can’t rely on popping into the office to see who is working on a project and who is beating their Snake score, knowing how your employees quantify productivity is the next-best thing. This may lead to a conversation about what you want to see in return, which is always helpful for your employees to know.

Another thing to discuss with your employees regards communication. Determining which avenues of communication are appropriate, which ones should be reserved for emergencies, and which ones are completely off the table is key. For example, you might find that most employees are comfortable texting each other while you prefer Slack or email updates. Setting that boundary ahead of time and making it “office” policy will help prevent strain down the road.

Finally, checking in with your employees about their expectations is also important. If you can discuss the sticky issue of who deals with what, whose job responsibilities overlap, and what each person is predominantly responsible for, you’ll negate a lot of stress later. Knowing exactly which of your employees specialize in specific areas is good for you, and it’s good for the team as a whole.

With these 3 discussions out of the way, you can turn your focus to more nebulous concepts, the first of which pertains to hiring. Loop your employees in and ask them how they would hire new talent during this time; what aspects would they look for, and how would they discern between candidates without being able to meet in-person? It may seem like a trivial conversation, but having it will serve to unify further your team—so it’s worth your time.

The last crucial conversation, per Forbes, is simple: Ask your employees what they would prioritize if they became CEOs tomorrow. There’s a lot of latitude for goofy responses here, but you’ll hear some really valuable—and potentially gut-wrenching—feedback you wouldn’t usually receive. It never hurts to know what your staff prioritize as idealists.

Unifying your staff can be difficult, but if you start with these conversations, you’ll be well on your way to a strong team during these trying times.

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