Encryption should be part of your plans

On October 1st, a new law in Nevada will require those transmitting personally identifiable information outside of a secure, closed network to send it encrypted. The law reads, in part:

"A business in this State shall not transfer any personal information of a customer through an electronic transmission other than a facsimile to a person outside of the secure system of the business unless the business uses encryption to ensure the security of electronic transmission."

Massachusetts has passed a similar, but more restrictive law that will go into effect on January 1, 2009. While the Nevada law focuses on electronic transmission of information, the Massachusetts law focuses on the portability of data. That means that any personally identifiable information data you have on a Massachusetts resident that is stored on a laptop, mobile device, thumbdrive, etc. must be encrypted.

I'm not sure how these states, particularly Massachusetts, will enforce their laws for those outside of the state. However, given that New York has invented a way to charge Amazon.com sales tax even though the company has no facilities in the state, inventive minds will likely prevail.