From: jim bell <jimbell@pacifier.com>
Date: Tue, 1 Oct 1996 14:08:30 +0800
To: "E. Allen Smith" <cypherpunks@toad.com
Subject: Re: [NEWS] More internet-tax proposals
Message-ID: <199610010347.UAA22294@mail.pacifier.com>
MIME-Version: 1.0
Content-Type: text/plain


At 04:08 PM 9/30/96 EDT, E. Allen Smith wrote:
>>     INTERNET BEWARE: GOVERNMENTS ARE SMELLING A RICH NEW SOURCE OF TAXES
>>      Copyright &copy 1996 Nando.net
>>      Copyright &copy 1996 The Boston Globe
>>   So Netcom contacted state tax officials for clarification. Netcom's
>>   500,000 customers are scattered throughout the United States, but the
>>   company is focusing on tax laws in Massachusetts and 14 other states
>>   where most of its customers dwell. Weatherford said he still had
>>   received no official word from Massachusetts, but Netcom attorneys had
>>   concluded the company is subject to the state's telecommunication
>>   sales tax. To play it safe, it will begin collecting the tax this
>>   month.
>
>	Remind me not to sign up with Netcom.
>   
>>   It's probably a smart move. At the Massachusetts Department of
>>   Revenue, acting general counsel William Hazel told the Globe that
>>   Netcom and every other on-line service provider should be paying the
>>   sales tax.
>   
>>   "To the extent that folks are being charged for the ability to
>>   telecommunicate through the Internet... that's taxable," he said.

Obligatory AP solution:

If Netcom and every other telecommunications company doing business in 
Massachusetts were to pool their money, say a half a year of their normal 
payments, they could (in effect) buy an "AP Insurance Policy" which would 
guarantee that they wouldn't have to pay the tax...forever.

Since Netcom is a known entity, all they'd have to do is to announce 
publicly that they are not going to pay the tax because they don't believe 
they owe it, but that they are going to allocate a certain proportion of its 
gross receipts into a fund to disable the tax collection...by "other 
means"...if it was ever tried.  This would have to be a rather powerful 
deterrent to any state attorney considering opening up this can of worms.


Jim Bell
jimbell@pacifier.com