DC Rejects New Tax on Data

The City Council for Washington, DC voted on July 28, 2020 to reject the proposed three percent tax on the sale of data, as requested by the Insights Association and a large coalition of interested businesses and associations.

Following a vote to replace the projected revenue with other sources on July 21, Councilmembers voted yesterday to completely delete the Advertising and Personal Information Tax Amendment Act of 2020 from the District of Columbia’s FY21 budget, which would have added a 3 percent tax on the sale of personal information and on advertising. The Act’s definition of personal information was so broad as to likely include the sale of any data, not just data traditionally understood to be personally identifiable.

As stated by our coalition: “We strongly commend the Council of the District of Columbia for removing the advertising and personally identifiable information sales tax from the FY 2021 budget. This proposed tax would have created a substantial barrier for economic recovery and job creation in the District. Its removal provides a far better environment for the many large and small business and media entities struggling to recover from the impacts of the COVID-19 pandemic. We very much appreciate the Council’s willingness to carefully examine these critically important issues and to develop alternatives to meet the District’s budget challenges.“

Howard Fienberg, VP Advocacy for the Insights Association, commented that, “Businesses rely on data to understand the wants and needs of their consumer base. The new tax on data sales would have increased the cost of planning and decision-making, disincentivizing the marketing research and data analytics essential to economic recovery and the return of lost jobs to the District of Columbia.”

IA looked at the data tax versus existing DC tax law and had urged our members to contact their Councilmembers in opposition to this new tax on the insights industry w/ a 1-page position paper.

NewsJoint Statement from DC Businesses and Associations on FY 2021 BudgetGovernment Affairs