ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, April 12, 1996 TAG: 9604120061
SECTION: BUSINESS PAGE: A-9 EDITION: METRO
DATELINE: SAN FRANCISCO
SOURCE: ELIZABETH WEISE ASSOCIATED PRESS
Slowly, surely and to the horror of many users, that final symbol of civilization - the taxman - is coming to the Internet.
A recent decision by the Florida Department of Revenue that it can tax companies providing Internet service set off a storm of protest by business groups. But unbeknownst to many, at least seven states and the District of Columbia already tax computer services - and more are considering it.
It's all part of a natural progression, said Dan Bucks, executive director of the Multistate Tax Commission in Washington, D.C. ``If states didn't update their tax systems to reflect changes in the economy and technology, [they] would still be basing their taxes on the number of horses you use to draw your buggy,'' he said.
But just how to tax cyberspace transactions in a nation made up of 50 states and myriad counties, each with its own sales tax, is a daunting question for Internet service providers.
In the Florida case, a Gainesville company that sells Internet access on a subscription basis called the state Department of Revenue last year to ask if it should be collecting taxes.
After some deliberation, the department ruled that a 1985 rewrite of state law that added computer exchange services to the definition of telecommunication service meant that companies that sold access to the Internet were indeed required to pay a gross receipts tax.
But because the law was written before those kind of businesses really existed, the department went back to the state Legislature to make sure that's what it wanted. A hearing on the issue is scheduled for Monday in Tallahassee.
The tax - and the confusion - aren't restricted to Florida. Texas, Ohio, Pennsylvania, Connecticut, New York, Massachusetts and the District of Columbia also impose sales tax on information services, according to R. Scot Greirson, a California lawyer specializing in on-line taxation issues.
But the field itself is so new that, although laws may be on the books, collection is still a haphazard affair. ``Taxing online and Internet services at this stage of the game is a bit preliminary,'' said Robert L. Smith Jr., executive director of the Interactive Services Association in Silver Spring, Md.
LENGTH: Short : 49 linesby CNB