Rep. Cliff Stearns (R-FL) has introduced a bill that would prohibit state and local governments from regulating and taxing commercial transactions in digital goods and services over the Internet.
Those goods and services, which represent nearly 1% of all online sales, include such things as e-books, computer software and downloadable entertainment and information programs, many of which are heavily promoted through direct response print and broadcast, and direct mail, and both solicited and unsolicited e-mails.
According to the Jurisdictional Certainty Over Digital Commerce Act (HR-2421), the federal government has the right and responsibility under the Commerce Clause of the U.S. Constitution to “regulate digital commercial transactions.
While the measure would not supercede the authority of state and local governments to regulate commercial transactions within their respective borders, it would prohibit them from attempting to regulate or tax commercial transactions in digital goods and services through statute or administrative regulations.
But it does give state and local governments the authority to take legal actions, civil and criminal, against anyone who uses a digital commercial transaction that threatens an individual’s health or safety through fraud or other criminal activity.
Introducing the bill, which has been referred to the House Commerce and Judiciary Committees for review, Stearns said, “it is not in the public interest to have thousands of disparate and inconsistent regulations, including taxation, apply to transactions in digital goods and services carried out entirely on line.
“Having 50-plus separate, and at times incongruent regulations governing interstate commercial transactions poses a substantial burden to interstate commerce in general, and to e-commerce specifically,” he added.
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