In a story published by Circleid.com written by Alex Tajirian, CEO at DomainMart, Mr. Tajirian suggests that all parked, “unused” or “idle” pages need to have a Tax imposed on them to reduce cybersquatting, even if the domain name is generic.
Mr. Tajirian proposes that all “parked” domains or “unused” or “idle” domains be subject a tax similar to a property tax for real estate:
“We need a tax.”
“Right now a tax is the weapon needed by the domain name community. We face way too many cyber and typosquatters. To drive them back, let’s tax parked and unused domain names.
The tax will make it much harder for speculators to turn a profit while they keep domains sitting idle or parked.:
The industry, not government, will impose the tax, and the revenues will go to the Internet community at large. Meanwhile, brand-name owners will see lower legal fees, reduced IP damage, and less siphoning of revenue.
Cybersquatting has continued full-strength after the rollout of the new gTLDs. Registries declare their intention to block unauthorized registrations, but the registrations continue. This is despite the advent of new safeguards like the Trademark Clearinghouse (TMCH) database and Uniform Rapid Suspension (URS) services.
I propose a tax similar to a government land value tax, which is a levy on the unimproved value of land only.
For domain names, the tax would be based on their market values, and levied on parked and undeveloped domain names billed to the registrant. ”
The tax should be high enough to deter parking and encourage development of domain names.
Winston Churchill said scornfully that a landlord “contributes nothing to the process from which his own enrichment is derived.” The same is true of people who buy domain names and leave them parked and undeveloped.
If the names gain value anyway, the Internet community should get a share of the added value””
Hum
So basically as the owner of the parked domain stallions.com, I should pay a “Tax” for the idiot who registered Walmart.horse.
That makes a lot of sense.
When I was researching some domain names for a post I wrote about the official site of the Eiffel Tower moving to a .Paris domain, I can across the domain eiffeltower.com, which if you look only has 1 picture of the landmark on the domain and nothing else.
It’s not a parked domain
The domain is in use, but not much in use.
The domain is not idle, but not full of activity.
So I assume if we go with Alex’s plan, someone, lets say WIPO or the IRS, will have to set up a Domain Tax Board who can review domain names and determine if they are parked, unused or idle and either be subject to tax or tax-free.
If your site is subject to tax maybe you can get a tax credit for each picture or word on the page.
That would be a Domain Tax Credit.
I can see a 500 page document that spells out the Domain Tax Rules and Regs
Of course we will need a Domain Tax Court to appeal an unfavorable decision, like you can appeal a property tax valuation.
Then there will have to be a committee to decide how all this Domain Tax revenue should be distributed amongst the “Internet Community”.
Of course each member of the committee will have to get some compensation for serving and to go to ICANN and other meetings they will have to have a travel budget, staff and legal just to start.
By the way Mr. Tajirian at RightoftheDot.com we work with some Fortune 5000 companies and not all of their domain names resolve to real sites. I’m sure Microsoft and Google will be thrilled to pay a tax on thousands of domains that are inactive, are being re-directed or not used up to your standards, including thousands of defensive registrations.
Nothing like spending 6 or 7 figures on defensive registrations and then forced to pay a tax on all of it.
The last time Verisign reported on the percentage of “parked” domains it was around 12% of all .com domain names.
Not sure about unused or idle sites.
According to ntldstats.com over 57% of all new gTLD’s are “parked” meaning that it’s highly likely that at least that many will be subject to the Domain Tax
I would assume that many registrants who get hit with a “property tax” will just drop the domain name registrations which should thrill all of the registrars and registries.
The millage rate for property tax varies from state to state and county to county, in South Florida the rate is around 2% of value
You own a house with a $1M value you are going to pay $20K a year in property tax.
$3 Million dollars house $60K in taxes.
Of course for your property tax you fund police, fire, schools, hospitals and other services.
Not sure where the Domain Tax is going to go to other than to the “Internet Community”
By the way who is going to value all these 280 million domain names?
Lets just say the “Tax” would reduce the domain name base from over 280 million to under 200 million within like a day, including the 30 Million .TK domains.
All and all it sounds like a great plan which should really help the industry; the registries, the registrars and of course the registrants.
For the record, I’m willing to serve as the sole judge of the Tax Domain Court for a reasonable $800K per year plus travel and staff or around what the CEO of ICANN makes, which is 4x more than the President of the United States.
If you want to hire me, you got my number.
This is one of the funniest “ideas” I have ever heard!
Hey Alex, you are a bit late for April fool’s.
And we are already paying renewal fees and the ICANN fees. Remember that?
The premise seems crazy on face value but you there are already premium structures built into many of the new gTLDs which means that someone has undertaken the effort to try and create that value based adjustment already for 100,000s of names. .TV has had this in place for years (and it’s VeriSign).
There is also, one could argue, a significant issue with the anti-competitive nature of .com. This could be something that both the new gTLD operators and VeriSign would both like to argue which could make it more realistic in 2018.
Combine these factors and it would be reasonable to presume that an organization (ICANN) could embed the premium (prefer not to call it tax as it will likely be non-government driven) into the renewals as a simple value added adjustment. Everyone is always talking about the implicit value add of .com – why not make that value add a premium?
It gets dubious around asking for premium/taxation on valuation where valuation is based on the Trademark but you could very easily implement a Trademark rebate (where filed in a TM clearinghouse – concept in place) gets the premium credited.
Will it happen? No it will not. It’s not as crazy as it sounds though. It’s no more crazy than suggesting that the owner of Stallions.com should be paying the same renewal as the owner of ILikeToHaveHorse.Photographs
The idea is, as written, insanely stupid; however, the underlying concept could very well be part of the future. This idea of a value tax is another example why the domain as property analogy needs to be dropped by domainer investors.
Premium renewals on .com would be an interesting idea if posited by a private international organization not bound to the U.S. Department of Commerce.
LOL Mike is this the same “STROKER” ALEX that sends out the spam e-mails trying to selldomains the like type we have. If so or maybe even if not send comments to Circleid.com and domain mart
exposing this left over joker from April foolz day.
NOTE domainmartsucks is not taken YET
OR Does this tell the story is ALEX a (form211 IRS WHISTLE BLOWER)
Press Release: The IRS Issues a “No Change Letter” for DomainMart’s Appraisal
Summary: The IRS officially accepts DomainMart’s domain name appraisals for tax-deductible charitable contributions.
It is a stupid idea. For one companies like Google and Apple owns hundreds of thousands of domains not in use. Big companies with large domain name portfolios won’t be happy, not just domain “investors”.
Secondly, it is a slippery slope of trying to define the meaning of “in-use”. Not every domain name “in-use” have public facing websites or e-mail addresses. And how do you police that?
Thirdly, I can easily make the domain name “in-use” by setting up a WordPress site to automatically blog every 10 minutes. How are you going to classify that?
Good points. Not only that, he says the tax levied on a domain name should be based on the market value. Who is going to review every single domain name that is registered and then make an assessment of the value? That is not practical, nor feasible.
Sounds like a bitter person who wasn’t able to get the domains he wanted at reg price.
“Sounds like a bitter person who wasn’t able to get the domains he wanted at reg price.”
Yup. I think he emailed me the other day and offered me $1 for a domain I had registered 11 years ago.
He sounds like a bit of a “B” anker Not a chance in hell I hope.
Or a “W” anker.
“Better to remain silent and be thought a fool than to speak and to remove all doubt.”
Don’t you already have to pay tax on any revenue you earn from the site? If you sell the domain, don’t you already have to pay tax on the profit?
The bottom line is that he doesnt want you to hold onto domain names at all. What would be a great kick in his ass is if this tax is enacted and NOTHING CHANGES. We continue to buy and park domains for investment. But I bet the whiny little toddlers out there will still find something else to complain about domain names that someone else got to register before they did. These people really remind me of those “occupy wall street” babies. Go find another problem that doesnt exist, maybe global warming or something like that.
Domains can also be used for other service than HTTPS/HTTPS and would therefore show no active website. There are tons of other services like email, telnet/ssh, dns.
Jim
Yes but if you follow the property tax analogy, if you have a rental property you have to pay taxes on the revenue from the property and you have to pay income tax when you sell the property (if at a profit) but you also have to pay an annual property tax in addition to.
The real property anology is being evicted because some snooper doesn’t think all the beds are being occuppied every night.
I run and a small business in domains and all ready pay close to 40 percent.
Come on now. Another jealous mother fucker
The product costs 15-25c each to deliver. We pay $8-$30 or more for each one. ICANN receives a fee for each domain registered. Where I live we pay gov tax already on renewals and purchases.
When the industry started N.S. used to charge $100 each with the monopoly they had. That didn’t stop anyone.
Seriously if you need a cruscade try getting some teeth put into the reverse hijacking issue. That would be of far more value to the industry than worrying about whether marginal domains are parked or not.
This is a great idea, perfect for Castro’s Cuba.
We pay yearly renewal fees = tax
We pay a yearly fee to ICANN = tax
And we pay tax when we sell a domain.
And then some moron comes along saying unused domains should be taxed lol.
First of all, what defines “unused”? I have a landing page on all of my domains that I have for sale so in my opinion they are in use. The landing page has content and pictures.
Secondly, as someone else pointed out, to avoid this (never going to happen) tax you could simply put a free WordPress site on any unused domain in 5 minutes flat to avoid this tax.
Thirdly, this ridiculous tax would not only hurt trademark infringers but regular domain investors as well (but I have a feeling this Alex person thinks there’s no difference between a domain squatter and a legit domain investor). Fourthly it would financially hurt Fortune 500 companies big time (and all other companies who made defensive registrations). Google for example has thousands of domain names registered. I can guarantee you that they will make sure no silly tax like this will ever become a reality.
And finally this tax would financially hurt people who registered a domain with a real intention to develop it later. So let’s kill innovation with this tax and make sure people with great business ideas will be demotivated from the get-go to develop them.
“but I have a feeling this Alex person thinks there’s no difference between a domain squatter and a legit domain investor”
Exactly. You got to register domain names that he wants and now he’s whining like a baby. So, lets harm the entire industry because he and a few others were late to the game.
My God. I didnt get in on the ground floor of Microsoft and Apple stock. Lets tax those who got there first! Yea, that will work.
Grow some, Alex. Grow some.
The man lives to hear himself talk. Thankfully his opinion means nothing.
There are so many flaws in the premise it is not worth critiquing.
Like Acro mentioned perfect for Castro’s Cuba
Alex Tajirian=noob
who said only the little people pay tax, Leona Helmsley, i must be little.
Unlike real properties, I don’t feel like owning but more like renting my domain names (renewals)
I am sure ICANN are already working on it………
…… but if there usual progress is anything to go by, then we will all be dead by the time he gets his way!
I am sure Congress would love to see ICANN be established as grey tax authority.
identifying Historically Underutilized Business Zones (HUBzone) designates domains preferential competitive access via SBA (Small Business Administration), at least in the USA, who knows about Turkey.
Hello,
I think all website that looks like something from out of 1998 should be heavily taxed for not being user-friendly etc.
Such as: http://www.domainmart.com
😉
The amount of time and resources needed to implement this senseless tax would far outweigh any imaginable benefits, of which I see none.
How could the delegated committee possibly comb through the hundreds of millions of domains and classify certain ones as being unused? Disregard the amount of (wasted) time this would take for a second, and focus on the issue of determining a clear and consistent definition of “unused.” Now stop before you give yourself a headache.
However, on top of all the glaring technical issues, the proposed tax bothers me most because it would significantly discourage investment in the domain space.
My comments to Acro asking what this has to do with Cuba were removed – I’m guessing for being considered a personal attack (against an unknown individual)? or off topic?
I’m genuinely interested because typically an unqualified “Castro” is Fidel and there is no tax parallel at all. If you are talking about Raul – then there is a tax policy discussion worth having but I still fail to see the commonality between that policy and the proposal in your post. I was just wondering if I misunderstood Cuban economics or the post – or if it was just some random meaningless comment.
As for deleting my posts, fair enough, I respect your right to remove comments but I’m glad that people can come to your blog and call the subject of your post a “W”anker and it’s left alone. Apparently that is neither a personal attack, nor off-topic, and not in any way profane. Nor was it when I called Rick an asshole. So I guess it’s only personal when the person is not actually known 🙂
I enjoy your blog and apologize for causing you to have to remove posts.
A tad anal about some things are we? Drop the Castro BS plse. it doesn’t take a rocket scientist to know he was referring to a socialist gov and system where everything BELONGS to and is controlled by the gov. (like it doesn’t here)
Love him or hate him Rick has done more for this industry than any other single individual. Over the last 17 years I’ve watched him step up to the plate time after time and put his money where his mouth is. He deserves yours and anyone elses respect just for the battles he’s fought and paid for. We’ve all benefited from them. Calling him an asshole makes you the bigger one.
Why don’t you tell us what you’ve stood up for besides loitering around chats and posting with an anony name linked to a blank blog!
“socialist gov and system where everything BELONGS to and is controlled by the gov”
I’ll quit being anal and continue to allow everyone to have a complete misunderstanding of politics, economics, and taxation. Some of the comments certainly show a misunderstanding of Socialism.
Clearly, making fun of someone’s opinion in a well read blog should be done from an uneducated position. We should just get our laughs in amusing ourselves in someone else’s folly. No point actually talking about the subject when we can just make fun of someone.
I’ll drop it.
“He deserves yours and anyone elses respect just for the battles he’s fought and paid for. We’ve all benefited from them. Calling him an asshole makes you the bigger one. ”
The world is littered with people that deserve respect that are assholes. He does do some positive things, no doubt, but his approach to many other things makes him a jerk. I respect him and what he’s done to get where he is. I can also say that I believe he revels in the role of jerk. I think he gets more deferential treatment than he deserves because domainers, more than most, worship at the temple of Mammon.
I can respect his achievement but doesn’t mean I have to respect his attitude.
Maybe in real life he’s a nice guy but online he fosters the image he does and so calling him an “asshole” would, I think, be treated by him in context as a compliment.
“Why don’t you tell us what you’ve stood up for besides loitering around chats and posting with an anony name linked to a blank blog!”
I loiter around on chats and post with an anonymous name trying to provide a different perspective to the flocking mentality that I feel people have. I am wrong. I am right. I am nice. I am an asshole. In real life I know what I do and who I do it for and it’s none of your business if it was it would be part of a more colorful blog. A blank blog is probably as meaningful as one that hasn’t been updated since 2011, perhaps.
Maybe that’s because I do things in the industry. The site you mention goes back to 2001 that’s a long time, my bonafides in the business are more than established and maybe the blog hasn’t been updated since 2011 because I’ve been running one of the domain chat boards over at Linkedin instead. You know doing something positive.
I guess that’s why us birds of a feather flock together. Being successful and positive and all. Not some anon weasel sitting on the sidelines looking for an opportunity to attack.
Congratulations on your success.
No need to apologize, The comments that were off topic were removed correct, the comments with people calling people asshole were also removed, filters are being put in place so comments with certain words that are name calling or profanity won’t be published.
Thank you
Mr Tajirian needs more tutorials on the workings of the World Wide Web. Perhaps he is a citizen of the moon.
Quit pretending to be the defenders of capitalism while you extort entrepreneurs of thousands of dollars for their own god damn brand.
The fact of the matter is that your domains are not worth 10k or even 1k. because they have no brand associated with them. So you are forcing business owners to buy something of no real value. Or they buy the .US /ect and build the brand and save up enough to buy the .com. Now it’s actually worth 10k. but not because of you. It’s because of the entrepreneur that built the brand. And you are charging him for that.
Personally I hope something gets done to put you all out of business. Unlike real estate investors You don’t add any value to the marketplace. You just siphon value out of it.
I’d argue a $200 a year tax on all domain names could make hoarding them expensive with little impact on legitimate business owners. But then the unintended consequence of that would be you just raising your prices.
Unless you own an insurance agency. There is no god damn reason to own johnsinsuranceagency. So quit extorting john of his hard earned money for his own damn brand.