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Tax Law

West Virginia Proposes Data Mining Service Tax

On February 11th, West Virginia Delegate Cody Thompson (Democrat) introduced House Bill 4898, which would impose a general data mining service tax. The bill would require “commercial data operators” generating revenue from the use, collection, processing, sale, or sharing of West Virginians’ user data to pay the tax at the rate of one cent per dollar of value of user data. The Commissioner would be granted the authority to develop the method to calculate the value of user data.

A commercial data operator is “an entity acting in its capacity as a consumer online services provider or data broker that: (A) generates a material amount of revenue from the use, collection, processing, sale, or sharing of the user data; and (B) Has more than 10,000 unique monthly visitors or users in West Virginia for a majority of months during the previous one-year period.” “User data” is defined as “any information that identifies, relates to, describes, is capable of being associated with, or could reasonably be linked with an individual user, whether directly submitted to the commercial data operator by the user or derived from the observed activity of the user by the commercial data operator.” The bill would require each commercial data operator, at least every 90 days, to provide an assessment of “the economic value that the commercial data operator places on the data of its users,” along with identifying the types of data it collects from users and the ways that data is used.