Insights Association criticises Washington DC data tax proposal

In a letter dated 16th October 2023 and sent to the DC Tax Revision Commission, the IA said it had “strong opposition to your consideration of SE1, the proposal for consumer data excise taxes in the District of Columbia”.

The letter added that the proposal should either be rejected or an exemption added for the market research industry.

DC City Council proposed an advertising and data tax in 2020 that was ultimately not passed into law, and the IA said the current proposals would “have the same catastrophic impacts”.

“Consumer data excise taxes are severely misguided. Rather than primarily targeting ‘big tech’ companies, they would primarily hurt most small businesses that operate in the district,” the IA letter explained.

“A tax on consumer data would fall on insights service providers, resulting in increased costs to conduct market research studies, resulting in fewer companies and organisations seeking to purchase studies in DC or conduct them there.”

The letter added: “All manner of organisations rely on the insights generated by these studies to understand the wants and needs of their consumer/customer/stakeholder bases.

“The new tax would increase the cost of planning and decision-making, disincentivising the insights essential to economic growth and bouncing back from crises.”