Sales Tax & Privacy Laws

One of the things people from Europe don’t understand about the United States is why the price printed on a product is not the price they pay at the register.

We don’t have a national “Value Added Tax” (VAT) here. We “sales tax” and the sales tax rate varies by not only by state, but also the county, city, postal code, sometimes the specific address of the store, and it can even vary down to the level of the individual sales transaction. For example, if I go to the store and buy a computer for a non-profit organization, I don’t pay sales tax. If I buy that same computer in the same store for myself, I do. There can even be specific days where the sales tax can be suspended or the rate changes in any one of those sales tax jurisdictions. Some products are exempt from sales tax in one state, but are not in another. It’s a mess. This is Just How Things Are. A company called Vertex, Inc. keeps track of this sales tax stuff and they publish a map:

We’re headed down the same path with privacy laws.

Europe has the GDPR. It’s a big regulation, but it covers the whole EU. It is the VAT of privacy. The United States does not have — and in my view will probably never have — something like the GDPR.

So take a look at this — the IAPP has a similar map of “comprehensive privacy laws” — and it is easy to see the similarity to the sales tax map:

The question for any organization that’s accumulating consumer data is if you’re about to experience a snap transformation of your data from an asset to a risk when you have state-level privacy regulations that conflict with your business model — or worse, regulation conflicts where what you do in one state to comply with their laws puts you in non-compliance with another state’s laws.

Fortunately, there are some pretty good solutions to this issue — but they require re-thinking the whole “consumer data is an asset” mindset that drove the “engagement economy” (and “free” content) for the last 15+ years. It’s not consumer data that’s the asset — think of that as raw materials, ideally you don’t have to keep much laying around and protected, because what you really want is the more valuable finished product —the insights, efficiencies, and strategic value of the data. This is possible right now via really cool new ways of thinking about and using data! Watch this space for some upcoming explorations of what the world beyond data hoarding looks like.