International news

Streaming services urge OECD to consider cultural levies for DST rollbacks

Various streaming service companies recently responded to the OECD’s public consultation regarding the rollback of digital service taxes (DSTs) in Pillar I. The OECD plans to roll back unilateral DSTs as part of the 2023 multilateral convention. In the comment letter, the streaming service companies emphasized the limits on market access, increased costs of doing business, and harm to the consumer market that result from the enactment of unilateral DSTs, stating that “measures should be assessed on the basis of their nature and economic impact and not based on the labelling thereof.” The streaming companies claim that cultural levies, such as those imposed by countries on foreign media service providers, are akin to DSTs and should also be eliminated in the upcoming rollback.

Officials address forthcoming guidance at DC Bar Annual Conference

OECD and Treasury officials at the DC Bar Taxation Community’s Annual Conference spoke on a range of upcoming guidance. Jeff Mitchell, senior adviser at the OECD’s Centre for Tax Policy and Administration, explained that conditions for the safe harbor treatment of qualified domestic minimum top-up taxes (QDMTTs) are premature. During the conference, Mitchell noted that the safe harbor is “an order of work issue” and that countries will first need to design their QDMTTs. The OECD will soon publish administrative guidance as part of the Pillar II implementation package that was released in December 2022, which will include initial QDMTT guidance to assist the development of safe harbors.

Additionally, a Treasury official noted that the OECD will release guidance on the global minimum tax “very soon.” The guidance will address the various remaining open implementation issues on Pillar II including guidance related to certain U.S. tax credits. An attorney-advisor in Treasury’s Office of Tax Policy noted that the document would also include specifics on accounting for GILTI liabilities for US multinationals.

United States news

New York revisits the commercial data collection tax

New York legislators continue to introduce bills targeting the digital economy and data collection. On January 18, New York State Senator Liz Krueger (D), Chair of the Senate Finance Committee, introduced S2012, which imposes a monthly excise tax on for-profit entities collecting and selling data from more than one million New Yorkers per month. The tax would apply regardless of how the data is collected, whether by electronic or other means

The tax rate in S2012 would apply on a graduated scale based on the number of New York consumers whose data the taxpayer collects in a month. The tax starts at 5 cents per individual per month on the number of New York consumers over one million, which would cost businesses at a minimum $50,000.05 per month. The tax rate then gradually increases both in rate plus an additional flat rate amount. The highest rate is 50 cents per month on the number of New York consumers over ten million, plus a flat rate of $2,250,000. This legislation was previously introduced by Sen. Krueger during both the 2021 and 2022 legislative sessions in New York.

Massachusetts throws digital taxes against the wall to see what sticks

Massachusetts legislators have introduced a flurry of bills that would tax digital advertising, commercial data collection, or the sale of personal information. On January 18 and 20, state legislators in Massachusetts introduced six draft bills that would adopt a digital advertising services tax. Additional bills were introduced that would tax commercial data collection or the sale of personal information. Read more about each bill here.