While the Senate is likely to pass the Marketplace Fairness Act being rammed through the Senate past the red tape of committees and onto the floor for a vote later today or by the end of this week by Senate Majority Leader Harry Reid (D-NEV.), House Republicans face a roadblock that they put in place themselves when it comes time to vote for their Internet tax bill: a pledge.

The movement to bring State sales tax across the board to Internet retailers got an important endorsement this week as President Barack Obama "enthusiasticlly endorsed" the efforts by Senator Harry Reid (D-NEVADA) to push the Marketplace Fairness Act forward at a breakneck pace - according to The Hill. Senators advanced the bill in a 74-20 procedural vote on Monday evening, one vote less than it received in a test vote last month.

Senate Majority Leader Harry Reid (D-Nevada) this week began the process of pushing the Marketplace Fairness Act before the full Senate without making its way through the Senate Finance Committee (mostly because many of the leaders in the committee don't like the bill and would stall it), according to Politico.

During the United Kingdom's March 2012 Budget it looked like plans for tax breaks for video games developers were a lock, but a European Commission (EC) investigation that was announced today has put their future in doubt. The European Commission announced today that it plans to investigate the proposals, and questions whether there is an obvious market failure in the UK games industry.

Specifically the EC is seeking answers to four key questions related to the UK games tax relief plan:

Tax relief for the video games industry in the United Kingdom has been delayed because the European Commission was not able to approve the Cultural Test provisions of the plan, according to this GamesIndustry International report. The Cultural Test requires those applying for tax credits to promote the culture of the UK in various ways.

UK games industry trade groups UKIE and TIGA expressed their disappointment in the news, but were optimistic that the government would continue to be committed to tax breaks for games developers.

When a publisher leaves a studio high and dry in the United Kingdom, industry trade body Tiga thinks that such abandoned projects should be eligible for tax relief. Tiga CEO Richard Wilson said that publishers have in the past left some studios in the UK “high and dry” by demanding large development teams for extended periods to then cancel a project with little or no notice at all.

As Republicans and Democrats publically spar over sequestration, House Majority Leader John Boehner (R-Ohio) has decided to throw "wasteful spending" into the mix by mentioning research on smoking machines, a free cell phone program, and even the use of video games for research on the elderly into the national conversation (here is a great explanation of what 'sequester' means, if you are interested).

An interesting article on The Atlantic examines why sin taxes like the one proposed for video games by Connecticut State Rep. Debralee Hovey (R-112th District) never really do anything productive. You may recall that Hovey, who represents the district that includes Newtown, Connecticut, proposed a 10 percent sin tax on violent video games rated "Mature" by the ESRB.

The Escapist reports that Connecticut State Representative Debralee Hovey (R-112th District) has introduced H.B. No. 5735, or "an act establishing a sales tax on certain video games." The bill would add a ten percent tax in Connecticut on video games rated "Mature" by the ESRB, which would then be redirected to the State's department of Mental Health and Addiction Services.

Missouri State Rep. Diane Franklin (R-Camdenton) put forth a bill on Monday proposing that the state charge a 1 percent tax on "violent video games," with the funds to be used for mental health programs and law enforcement efforts related to the prevention of mass shootings. This tax would apply to games rated Teen, Mature, and Adults Only by the Entertainment Software Rating Board.

As news of the Sandy Hook Elementary shootings in Newtown, Connecticut were coming to light on December 14, the finishing touches were being put on a deal with the Nevada Economic Development Board and Take-Two Interactive (see Vegas Inc. for the details). This week that deal is being questioned by the media in the state.

The Conservative Party of the United Kingdom (the Tories) have created a page on its official website detailing the planned implementation of upcoming tax breaks for the region's video games industry. According to the page on the official web site, tax breaks will officially go into effect on April 1. The page goes on to note that the new tax incentives will give a financial boost to the video game industry and "help level the playing field" against other countries already offering breaks for their own video game sectors.

The UK government released new details on tax relief it wants to offer the video games industry, as a follow-up to last week's Autumn statement. For starters, the UK government has decided that it will have no minimum spending threshold so that tax relief can be provided to companies of all shapes and sizes. The government came to this conclusion after a lengthy consultation period with developers across the region. The tax relief initiative will come into effect on April 1, 2013.

The United States Congress may be a mess and the most unruly and uncompromising bunch in the land but they all apparently think that the UN should not be setting policy on the Internet. To that end, members of the House of Representatives - Democrats and Republicans - voted unanimously (397-0) against the International Telecommunications Union (ITU) and the United Nations' efforts to push "increased government control over the Internet."

Today the UK Government published a document proposing strong support of Chancellor George Osborne's earlier Autumn Statement, which would give qualified games companies tax-relief set at a rate of 25 percent.

"Following consultation on their design, the Government will ensure that the reliefs are among the most generous in the world by offering a payable tax credit for all three reliefs worth 25 per cent of qualifying expenditure," the document read in part.

A prominent executive officer at Vancouver-based game developer Slant Six Games says that the Vancouver video game industry in danger of dramatically declining because of the lack of support from the government of British Columbia. CFO Lance Davis blames a lack of investment from the regional government since 2008. He also claims that this lack of support has led to 14,000 job cuts at various game studios in Vancouver. In June of this year Slant Six cut a quarter of its workforce temporarily.

UK video game industry trade groups UKIE and TIGA have submitted recommendations for the cultural test that will help the government decide which companies are eligible for tax relief. UKIE and TIGA shared its proposed recommendations with each other so that they could approach the UK government with a "consistent voice" on the topic. In order for a game to qualify for UK tax breaks, it will have to meet the requirements of a points-based test that focuses on "cultural content and contribution." Projects will need more than half marks (at least 16 out of 30) to qualify.

The Federal Communications Commission has started backpedaling after a loud and public outcry from rights groups and netizens about their proposal to tax broadband Internet services. Democrat and Republican commissioners at the agency are now pointing fingers at each other for bringing up the hot-button issue in the first place.

In an editorial on Ars Technica internet advocacy group Free Press described the FCC's move to tax broadband as a way to fund broadband infrastructure growth in the U.S. as misguided. Free Press Research Director S. Derek Turner says that the proposed $1 - $5 tax on customers would ultimately be turned over to companies like AT&T who have been slowly pulling out of the broadband business anyway.

The Economic Development Corporation of Rhode Island finds itself highly dysfunctional in the wake of 38 Studios going bankrupt and not being able to meet its obligations related to $75 million loan. The pseudo government-corporate entity has been without an executive director since May when Keith Stokes decided to resign over the loan to 38 Studios. Today we have learned from several published reports that another loan the EDC approved is not going to be paid back and that another executive has resigned.

The state of Delaware has decided to legalize online gambling today. The Delaware State Senate approved the bill by a 14-6 vote to allow online betting in the state. The next stop for the bill is the desk of Gov. Jack Markell (D) for his signature. With state and local governments seeing growing budgets and shrinking revenue, they have warmed up to the idea of allowing gambling both in their cities and online. The law is the second in the country to approve online gambling on a state level.

Update: A Boston Globe report indicates that 38 Studios founder and former Red Sox pitcher Curt Schilling has asked Rhode Island officials for more money for his company in the private meeting that was held this morning. The newspaper says that board members of the Rhode Island Economic Development Corporation took no action on Schilling’s request. The amount he asked for was not disclosed.

Former Red Sox pitcher Curt Schilling is probably not having a good week. The studio he founded, 38 Studios, is having serious financial trouble according to several news reports coming out of Rhode Island, and the state is doing what it can to protect the estimated $75 million in investments it spent to lure the studio away from Massachusetts.

In March of last year the state of Illinois decided to pass a law that collected Internet sales tax from online companies like Amazon.com and eBay. Commonly referred to as an "affiliate nexus tax," the law passed by Illinois and other states including California, Connecticut, and New York, required online retailers who advertised on "affiliate sites" that had a physical presence in the same state to collect sales tax. The Illinois law had broad support among lawmakers and the state’s governor, Gov. Pat Quinn (D).

UK video game industry trade group TIGA is advising the UK government against any plans to abolish the Department for Culture, Media and Sport (DCMS). The recommendation to abolish the DCMS as part of a tax cut package was part of a recent report from the Institute of Economic Affairs.

TIGA CEO Richard Wilson says that the elimination of the department would save very little money.

A federal judge has ruled in favor of Amazon in a case it filed against the state of Colorado for trying to collect sales tax under a new law. The court found that because the company didn't have a physical presence in the state that Colorado didn't have a right to collect and that its new law ran afoul of the Interstate commerce clause in the Constitution - specifically, legislation forcing out-of-state retailers to report their customers' purchases to the state's tax authority.

The Georgia Senate has voted to limit the amount of the 30 tax credits the video game industry gets to $25 million and to restrict the credit allowed to individual companies to a maximum of $5 million. Senate Majority Leader Chip Rogers said that the change allows for funds to spread around to smaller outfits rather than being used up by bigger companies. The new cap is a compromise from the original bill which sought to eliminate the tax credit altogether.

Paris, France-based game development studio Quantic Dream is thankful for yesterday’s announcement that the United Kingdom will offers its development community much-needed tax relief. Quantic Dream CEO Guillaume de Fondaumière went so far as to say that the UK games industry was facing a "tangible risk of collapsing" if the government hadn't intervened. de Fondaumière, who is also the chairman of the European Game Developers Federation, hopes that this will cause other governments in Europe to follow the UK's lead.

Today the British government announced that tax breaks for the video game industry are part of the 2013 budget (thanks beemoh). Chancellor George Osborne announced plans to introduce corporate tax relief beginning in April 2013 for various sectors including video games, animation and high-end television industries. Osborne hopes that these tax breaks will "make the UK the technology centre of Europe."

The Connecticut State Senate is considering a bill that would add taxes to digital goods. The "stated purpose of the bill, is "to include digital movies, books, music, ringtones, audio and video works and similar downloadable products as subject to the sales and use tax." If passed, the bill would take effect July 1, 2012, and would apply to sales occurring on or after that date.