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Question of sales tax on online purchases goes to high court
Legal News |
2018/04/15 19:36
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Online shoppers have gotten used to seeing that line on checkout screens before they click "purchase." But a case before the Supreme Court could change that.
At issue is a rule stemming from two, decades-old Supreme Court cases: If a business is shipping to a state where it doesn't have an office, warehouse or other physical presence, it doesn't have to collect the state's sales tax.
That means large retailers such as Apple, Macy's, Target and Walmart, which have brick-and-mortar stores nationwide, generally collect sales tax from customers who buy from them online. But other online sellers, from 1-800 Contacts to home goods site Wayfair, can often sidestep charging the tax.
More than 40 states are asking the Supreme Court to reconsider that rule in a case being argued Tuesday. They say they're losing out on "billions of dollars in tax revenue each year, requiring cuts to critical government programs" and that their losses compound as online shopping grows. But small businesses that sell online say the complexity and expense of collecting taxes nationwide could drive them out of business.
Large retailers want all businesses to "be playing by the same set of rules," said Deborah White, the president of the litigation arm of the Retail Industry Leaders Association, which represents more than 70 of America's largest retailers.
For years, the issue of whether out-of-state sellers should collect sales tax had to do mostly with one company: Amazon.com. The online giant is said to account for more than 40 percent of U.S. online retail sales. But as Amazon has grown, dotting the country with warehouses, it has had to charge sales tax in more and more places.
President Donald Trump has slammed the company, accusing it of paying "little or no taxes" to state and local governments. But since 2017, Amazon has been collecting sales tax in every state that charges it. Third-party sellers that use Amazon to sell products make their own tax collection decisions, however.
The case now before the Supreme Court could affect those third-party Amazon sellers and many other sellers that don't collect taxes in all states — sellers such as jewelry website Blue Nile, pet products site Chewy.com, clothing retailer L.L. Bean, electronics retailer Newegg and internet retailer Overstock.com. Sellers on eBay and Etsy, which provide platforms for smaller sellers, also don't collect sales tax nationwide.
States generally require consumers who weren't charged sales tax on a purchase to pay it themselves, often through self-reporting on their income tax returns. But states have found that only about 1 percent to 2 percent actually pay. |
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Supreme Court again refuses to hear Blagojevich appeal
Legal News |
2018/04/14 19:36
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The Supreme Court for the second time has refused to hear an appeal by imprisoned former Illinois Gov. Rod Blagojevich of his corruption convictions.
The justices didn't comment Monday in letting stand the convictions and 14-year prison term the 61-year-old is serving. His scheduled release date is 2024.
Blagojevich's lawyers had wanted the high court to take up his case to make clear what constitutes illegal political fundraising. They argued that politicians are vulnerable to prosecution because the line between what's allowed and what's illegal is blurry.
His convictions included trying to extort a children's hospital for contributions and seeking to trade an appointment to the Senate seat Barack Obama vacated when he was elected president for campaign cash. The court also refused to hear his 2016 appeal.
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Zuckerberg Flubs Details of Facebook Privacy Commitments
Court Line |
2018/04/13 19:31
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Over two days of questioning in Congress, Facebook CEO Mark Zuckerberg chief revealed that he didn’t know key details of a 2011 consent decree with the Federal Trade Commission that requires Facebook to protect user privacy.
With congressional hearings over and no immediate momentum behind calls for regulation, the biggest hammer still hanging over Facebook in the U.S. is a fresh FTC investigation . The probe follows revelations that pro-Trump data-mining firm Cambridge Analytica acquired data from the profiles of millions of Facebook users. Facebook also faces inquiries in Europe.
The 2011 agreement bound Facebook to a 20-year privacy commitment , and any violations of that pact could cost Facebook a ton of money, even by its flush-with-cash standards. If Zuckerberg’s testimony before Congress is any indication, the company might have something to worry about.
Zuckerberg repeatedly assured lawmakers Tuesday and Wednesday that he believed Facebook is in compliance with that 2011 agreement. But he also flubbed simple factual questions about the consent decree.
“Congresswoman, I don’t remember if we had a financial penalty,” Zuckerberg said under questioning by Colorado Rep. Diana DeGette on Wednesday.
“You’re the CEO of the company, you entered into a consent decree and you don’t remember if you had a financial penalty?” she asked. She then pointed out that the FTC doesn’t have the authority to issue fines for first-time violations.
In response to questioning by Rep. Mike Doyle of Pennsylvania, Zuckerberg acknowledged: “I’m not familiar with all of the things the FTC said.”
Zuckerberg also faced several questions from lawmakers about how long it takes for Facebook to delete user data from its systems. He didn’t know.
The 2011 consent decree capped years of Facebook privacy mishaps, many of which revolved around its early attempts to follow users and their friends around the web. Any violations of the 2011 agreement could subject Facebook to fines of $41,484 per violation per user per day. To put that in context, Facebook could theoretically owe $8 billion for one single day of a violation affecting all of its American users.
The current FTC investigation will look at whether Facebook engaged in “unfair acts” that cause “substantial injury” to consumers. |
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Facebook to stop spending against California privacy effort
Legal News |
2018/04/12 09:31
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Facebook says it will stop spending money to fight a proposed California ballot initiative aimed at giving consumers more control over their data.
The measure, known as the "California Consumer Privacy Act," would require companies to disclose upon request what types of personal information they collect about someone and whether they've sold it. It also would allow customers to opt out of having their data sold.
The company made the announcement Wednesday as chief executive Mark Zuckerberg underwent questioning from Congress about the handling of user data.
Pressure has mounted on Facebook to explain its privacy controls following revelations that a Republican-linked firm conducted widespread data harvesting.
Facebook had donated $200,000 to a committee opposing the initiative in California - part of a $1 million effort by tech giants to keep it off the November ballot.
Facebook said it ended its support "to focus our efforts on supporting reasonable privacy measures in California."
Proponents of the ballot measure applauded the move.
"We are thrilled," said Mary Ross, president of Californians for Consumer Privacy.
The California Chamber of Commerce and other groups are fighting to keep the measure off the ballot through the "Committee to Protect California Jobs." Google, AT&T, Verizon and Comcast also contributed $200,000 each to that effort in February.
Committee spokesman Steve Maviglio said the measure would hurt the California economy.
"It is unworkable and requires the internet in California to operate differently - limiting our choices, hurting our businesses, and cutting our connection to the global economy," he said. |
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Russian court blocks popular messaging app in privacy row
Court Watch |
2018/04/11 18:31
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A Russian court on Friday ordered the blocking of a popular messaging app, Telegram, after it rejected to share its encryption data with authorities.
The Moscow court on Friday ruled in favor of the Russian communications watchdog, which had demanded that Telegram be blocked in Russia until it hands over the keys to its encryption.
The ban comes after a protracted dispute between Telegram and Russian authorities, who insist they need access to the encryption keys to investigate serious crimes, including terrorist attacks. Telegram is arguably the first widely popular means of communications in Russia that has been officially banned.
Telegram, a popular app developed by Russian entrepreneur Pavel Durov, argues that Russia's FSB intelligence service is violating consumer rights, while authorities say the app has been used by violent extremists.
Durov had asked his lawyers not to attend Friday's court hearing because he said he saw the verdict as a foregone conclusion.
Pavel Chikov, one of Telegram's lawyers, said in a post on his Telegram channel that the company would not back down in the face of the Russian intelligence services because the court hearing, which lasted about 20 minutes, showed that the case against Telegram is politically motivated. |
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