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NY State Senator Proposes Data Tax

State Sen. Andrew Gounardes, D-Brooklyn, speaks during a news conference in late May.

Technology companies may be taxed for using the data that helps them sell you goods advertised while you’re surfing the internet.

State Sen. Andrew Gounardes, D-Brooklyn, recently introduced S.6727, the Data Economy Labor Compensation and Accountability Act. It would create the Office of Consumer Data Protection to regulate companies that profit from consumer data and to create a tax on their gross receipts.

It wasn’t likely that S.6727 would be passed before the end of the legislative session this week, but could be up for discussion when the legislature reconvenes next year.

Gounardes borrows from the European Union’s General Data Protection Regulation and the California Consumer Privacy Act to capture all entities controlling or processing consumer data for economic benefit. He said platforms such as Amazon or Google collect millions of data points on consumers across apps, search engines, websites and devices, then aggregate and encrypt this data and turn it over to second party auctioneers. The auctioneers then take bids on ad space from third party purchasers bidding on behalf of advertising clients who are looking to target a specific subset of consumers based on certain demographic traits, purchasing history and geographic location.

The Brooklyn Senator says his bill is careful in how it defines the word “sale” in order to capture what Gounardes said is a “convoluted” transaction chain. Companies that sell consumer data would have to register with the Office of Consumer Data Protection and pay a 2% gross receipts tax multiplied by the percentage of consumers or “data subjects” who live in New York.

Maryland and Vermont have each levied a similar tax, Gounardes said.

“Most importantly, however, a data tax will ensure that the general public whose data is being harvested for profit are able to reap the fruits of their currently free labor,” Gounardes said.

“By redirecting some tiny portion of the billions of dollars derived from the aggregate value of our swipes, clicks, cookies, browser searches, profiles, emails, texts, purchasing history, credit scores, and more from the shareholders of Silicon Valley tech companies to the New York State budget, we can end the exploitation of free, consumer-provided labor while helping to fund vital public services.”

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