Data Excise Taxes Are Cutting Edge, but Packed With Legal Risks

New York and Washington, D.C., are taking steps toward becoming the first jurisdictions to enact consumer data excise taxes, but attorneys representing technology companies warn the plans face great legal peril.

Also known as “data mining taxes,” the schemes would impose a levy on businesses that collect and monetize large amounts of personal information. While directed at big tech companies such as Amazon.com Inc., Apple Inc., Facebook, and Google LLC, the tax could also affect banks, credit card companies, and retailers.

No state has ever imposed a data excise tax, but the D.C. Tax Revision Commission recently included the idea ...