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Tech Crystal Ball 2018

Internet Sales Tax

In January, the Supreme Court will announce whether it will hear South Dakota v Wayfare Inc., a challenge to North Dakota v. Quill Corp., the opinion that currently limits states from reaching across their border to collect sales tax from remote businesses.

Parallel to these likely court proceedings, sales-tax expansionists on Capitol Hill will seek to knit their plan into a federal infrastructure-spending bill. Members will continue to be pressured by budget-strapped (and over-spending) states and cities, their lobbyists, and large retailers to expand sales taxes online. The idea will remain unpopular with voters. 

For more background on the issue, see the CEI Web Memo “Why Internet Sales Taxes Bolster Bigger Government: A Primer on Leading Proposals and their Political Prospects.”

Net neutrality

The net neutrality debate will move to Congress and to the courts.

Amid reasonable calls for Congress to codify into law the limits of Internet regulation issued this year by the Federal Communications Commission, inevitably there also will be calls for increased regulation to be included in legislation. Hopefully, this will provide an opportunity to articulate consumer benefits of many businesses practices that net neutrality regulations would prohibit.

Meanwhile, advocates of net neutrality regulation have already announced their plans to challenge the FCC’s Restoring Internet Freedom order in the courts. Although these litigants will likely ask a federal court of appeals to stay the FCC’s new rule, they will likely fail. The legality of the FCC’s recent order could reach the Supreme Court sooner than you might think—the Supreme Court has been asked to grant certiorari in Berninger v. FCC, a case that was previously known as U.S. Telecom Association v. FCC when the D.C. Circuit affirmed the FCC’s 2015 net neutrality rules in a divided panel opinion issued in 2016. If the Supreme Court agrees that the FCC erred in deciding to treat Internet service providers as common carriers under Title II of the Communications Act, it could foreclose the possibility of a future FCC undoing the Restoring Internet Freedom Order—even if Congress doesn’t change the law.

For more background on this issue, see “Net Neutrality 101” and the CEI OnPoint “A Net Neutrality Primer: Should the Internet Be Regulated Like Ma Bell?