Transacting in Data: Tax, Privacy, and the New Economy

50 Pages Posted: 17 Aug 2015 Last revised: 12 Jan 2017

See all articles by Adam B. Thimmesch

Adam B. Thimmesch

University of Nebraska College of Law

Date Written: February 29, 2016


The technological developments of recent decades have allowed companies to collect staggering amounts of consumer data by offering “free” access to digital products like search engines and social-media platforms. Scholars in a variety of fields recognize that this practice rep-resents a new type of market exchange, but our tax laws and tax scholars have thus far ignored this aspect of the new economy. That inattention means that transactions in data currently benefit from an implicit exemp-tion from tax. This Article brings light to that issue by providing the first analysis of the relationship between the personal-data market and our domestic tax instruments. That analysis shows that personal-data transac-tions do fit within those tax instruments, but that several factors will pre-vent them from actually being taxed. The resulting tax preference for data creates a distortion in the market that results in lost tax revenue and that undermines efforts to reform the personal-data market to better ac-count for individual privacy interests. This Article considers those issues and concludes by urging the recognition of the tax preference for data in the broader U.S. regulatory structure related to data and personal privacy.

Keywords: taxation, tax policy, big data, personal data, privacy

JEL Classification: K34, E62, H2

Suggested Citation

Thimmesch, Adam B., Transacting in Data: Tax, Privacy, and the New Economy (February 29, 2016). 94 Denv. L. Rev. 145 (2016), Available at SSRN: or

Adam B. Thimmesch (Contact Author)

University of Nebraska College of Law ( email )

103 McCollum Hall
P.O. Box 830902
Lincoln, NE 68583-0902
United States

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