The Internet Throws Tax Man for a Loop States Are Exploring How to Tap Net Access Providers

By Laurent Belsie, writer of The Christian Science Monitor | The Christian Science Monitor, September 19, 1996 | Go to article overview

The Internet Throws Tax Man for a Loop States Are Exploring How to Tap Net Access Providers


Laurent Belsie, writer of The Christian Science Monitor, The Christian Science Monitor


Benjamin Franklin once said taxes are one of life's certainties. But that was before the Internet. In the past year:

*California and New York have set up commissions to study the impact of cyberspace on taxes.

*Florida tried to tax companies offering Internet access but backed down after a storm of protest. A special Florida Internet commission is studying the issue. *Tacoma, Wash., made a name for itself by charging Internet access companies its standard 6 percent levy on telephone companies. Five months later, the city council voted to exempt them because it was bad for business. Cyberspace, it seems, is throwing the tax man for a loop. "Some people talk about taxing the Internet. But when you break that down what does it mean?" asks Scott Mackey, tax analyst with the National Conference of State Legislatures based in Denver. "The Internet is not just some thing out there you can tax. It's not a corporation. It's just a bunch of computers linked together." Part of the problem is that tax officials are trying to apply old standards to a new industry, which is always hard, tax experts point out. It's doubly difficult when the old rules are based on physical goods and physical space - concepts that the on-line world barely comprehends. For example: If a national Internet provider, such as Netcom, offers its service in a state but has no physical presence there beyond some local phone numbers, is it doing business there? Massachusetts thinks so. "It seems clear that the Internet access falls directly under our regulation," says Jeffrey Busha, spokesman for the Massachusetts Department of Revenue. The state has started charging a 5 percent tax on on-line service fees. "They're wrong," counters Martin Eisenstein, an expert on the issue and partner at Brann & Isaacson, based in Lewiston, Maine. He points to a landmark 1992 case in which the US Supreme Court ruled that states couldn't force an out-of-state catalog company to collect sales taxes if it didn't have a physical presence there. If that rule applies to catalogue companies, Mr. Eisenstein argues, it ought to hold for on-line companies too. Once states try to tax actual commerce over the Internet, the questions will get even trickier. Suppose a computer user in Nevada logs on to an Internet site in California to buy a product in Arizona. Which state gets to tax the sale? …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

The Internet Throws Tax Man for a Loop States Are Exploring How to Tap Net Access Providers
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.