From mbrennen@fni.com Sat Feb 3 06:07:51 2001 From: mbrennen@fni.com (Michael Brennen) Date: Sat, 3 Feb 2001 00:07:51 -0600 (CST) Subject: [E-Commerce] Edupage, February 2, 2001 (fwd) Message-ID: STATES CONSIDER WEB PURCHASE TAX Some governors and lawmakers plan to push legislation to standardize tax codes across the states to secure sales taxes on purchases over the Internet. Currently it is up to the buyers to pay sales tax by reporting such transactions on their tax returns. The National Governors Association says states will lose $20 billion in unpaid, online sales tax by 2003. If the new legislation were to pass, states would embrace similar sales tax terminology and classifications. New software would be developed to allow e-tailers to determine and collect the sales tax on a transaction depending on where the buyer lives. However, even if states choose to follow this approach, they will depend on e-sellers to collect taxes and send them to the states. In 1992, the Supreme Court ruled that a state cannot force a company to collect sales taxes unless it has a physical presence in that state. The proposed legislation faces opposition from government officials who are afraid of hindering the already slowed growth of the Internet economy by attempting to collect sales taxes. (Associated Press, 31 January 2001) IBM STRIKES A COPYRIGHT CHORD IBM is offering its new Electronic Media Management System (EMMS) software to help copyright owners combat the free distribution of their digital property on peer-to-peer networks such as Napster. "Over time, digital rights protection will become a normal part of the Internet's infrastructure," says International Data analyst Joshua Duhl. "We have reached a point where everybody's content has to be secured." EMMS allows copyright owners to set limits on how their files are used once they have been freely distributed. For example, a music file could be blocked from being recorded to a compact disc or rendered useless after it has been distributed a predetermined number of times. "This gives the content owner freedom to decide how their content will be used," says IBM's Scott Burnett. Online sales of music will reach $5.4 billion by 2005, 25 percent of which will be digital downloads, according to Jupiter Research. BMG Entertainment has already agreed to use IBM's EMMS. (Investor's Business Daily, 30 January 2001) THIS COULD BE THE YEAR FOR PRIVACY Privacy legislation is proliferating in almost all 50 states in 2001, and analysts believe that the lack of standardization in such laws could be the most difficult thing that businesses face. Companies such as Nationwide Insurance say they may be forced to base their privacy policies on those states that have the toughest standards so that they will be in compliance in every state. However, companies will find that compliance is costly. For example, if a company implements an "opt-in" policy for all its business units, it would require that its systems can easily exchange data, something that a company with a lot of legacy systems cannot easily do. Other companies, such as Microsoft, continue to advocate industry self-regulation in the privacy realm, something that is being met with much skepticism by government officials. (Computerworld, 29 January 2001)