****Tacoma, Washington Starts Taxing Internet Access 07/30/96

["Joseph M. Reagle Jr." <reagle@rpcp.mit.edu>]

>WASHINGTON, DC, U.S.A., 1996 JUL 30 (NB) -- By Bill Pietrucha.  
>Tacoma, Washington, has just gained the distinction of being the 
>only municipality in the United States to tax Internet Access 
>providers (IAPs) like telephone service providers. 
>
>The city of Tacoma has extended its six percent gross receipts tax on  
>telecommunications services to include Internet services, Information 
>Technology Association of America (ITAA) spokesperson Bob Cohen 
>told Newsbytes. 
>
>"IAPs use telephone lines to provide consumers with the `on-ramp'  
>access to the Internet," Cohen told Newsbytes. "Since consumers and 
>providers already pay taxes on basic telephone service," Cohen said, 
>"the new Tacoma tax would amount to double taxation, applying to 
>both the telephone service and the content transmitted over the 
>telephone line." 
>
>Cohen said ITAA has called on Tacoma Mayor Brian Ebersole to rescind  
>the new tax, saying that "excessive regulation and taxation will 
>change the fundamental nature of this new medium (the Internet)." 
>
>In urging the mayor to stop the city's attempt to impose a tax on  
>the IAPs, ITAA President Harris N. Miler said that "Tacoma will be 
>hurting both the Internet and its own economic future." 
>
>Miller told Newsbytes that the tax will mean "a loss of profits  
>to Tacoma-based IAPs, as well as a paperwork nightmare which may 
>drive companies out of business. IAPs doing business in Tacoma will 
>be at a competitive disadvantage to their competitors in other 
>municipalities." 
>
>Miller noted that the tax regime could cause Tacoma-based IAPs to  
>move to other jurisdictions, "taking the jobs they provide, and the 
>taxes they currently pay, with them. They (IAPs) may also decide not 
>to provide service to Tacoma residents rather than deal with the 
>administrative nightmare of complying with the new tax regulations," 
>Miller said. 
>
>If other cities attempted to follow Tacoma's lead in taxing IAPs,  
>Miler said, it could cause the "Balkanization of the Internet, a 
>hodgepodge of confusing, conflicting, and difficult to administer 
>Internet tax rules and regulations. 
>
>Miller also hinted that the tax could inadvertently be in violation  
>of international tax treaties. 
>
>"To begin taxing at the local level before it is clear what the  
>impact will be on industry and the public in general is bad public 
>policy," Miller said. 
>
>(19960730/Press Contact: Bob Cohen, Information Technology  
>Association of America, 703-284-5333, Internet e-mail bcohen@itaa.org) 
>  	   	
>
>
_______________________
Regards,            There are no facts, only interpretations. -Friedrich
Nietzsche
Joseph  Reagle      http://rpcp.mit.edu/~reagle/home.html
reagle@mit.edu      E0 D5 B2 05 B6 12 DA 65  BE 4D E3 C1 6A 66 25 4E