cr> Yes, Virginia, there may be a modem tax after all!


(The petition to the FCC was not truly calling for a modem tax (in the
sense that the old rumors and hoaxes used to alarm us about), but the
following efforts look pretty much like what was predicted.  Virginia
is not actually involved--this week it's Washington state and Florida.
These come from Jim Warren's excellent mailing list on government and
online services.  You can find out how to subscribe at the end.--Andy)

 From <>

                    NEW TOLLS ON THE INFO HIGHWAY?

                 States see big revenues in cyberspace

 Business Week: February 12, 1996
 Department: Government

 For cybernauts in Spokane, Wash., it was a rude awakening. On Jan.
 15, revenue-hungry town officials proposed a 6% tax on gross
 receipts of Internet access providers. Spokane City Councilman Chris
 B. Anderson, a foe of burdensome business taxes, blew his stack.
 ``This is a money grab on an embryonic industry that's only now
 becoming viable,'' he says. That afternoon, Anderson contacted local
 Net service companies to mount a defense, and one firm set up a Web
 site for users to blast the plan. The mayor's office and city
 council were flooded with E-mail and phone calls. Grassroots
 reaction was so strong Spokane decided to delay the new levy pending
 further study.

 A happy ending? No, just the beginning. The Spokane eruption is
 likely to repeat itself in cities and states across the country as
 local treasurers increasingly eye online services as a new source of
 cash. Business on the Net has mushroomed from nil two years ago to
 an estimated $200 million today, and state and local tax collectors
 from Washington to Texas to Florida are trying to devise ways to
 make sure they don't lose tax revenue as commerce migrates from the
 real to the virtual world.


 ``You can't ignore the growth of online
 communications,'' says Duston J. Jensen, tax manager of Spokane's
 cross-state rival, Tacoma, which recently was able to apply an
 existing telecommunications tax to its Internet-access providers.
 ``The Net is here.''

 Not so fast, says the nascent online industry, which has grown
 explosively over the past two years amid little regulation. Company
 officials are outraged at what they see as clumsy attempts to hobble
 cyberspace with ill-suited tax rules. The government has to be
 careful not to do ``something that's going to kill this business,''
 says Bruce J. Reid, director of state taxes at Microsoft Corp. ...

[The copyrighted article goes on to cite a number of similar tax threats in
other jurisdictions around the nation.  --jim]


One of Many: Florida Wants an Additional "Telecommunications Tax" on ISPs

It's not enough that there are already state and federal taxes on telephone use.

Date: Fri, 23 Feb 1996 12:51:20 -0500
From: •••@••.••• (George Pilat) [excerpting •••@••.•••]

... the Florida Department of Revenue is presently ... attempting to have
Internet providers (and all Florida BBS's, as well) charge a
"telecommunications tax" for their computer services.

The Florida Department of Revenue is attempting to say that Internet
providers (and BBS's) are telecommunications companies and, as such, should
be collecting the additional tax from their customers. This could add up to
17.5% on the existing fees. It seems to me, this goes directly against what
President Clinton and Vice-president Gore have been promoting - reasonable
priced (pronounced: cheap) Internet access for America (NII).

We are not standing idle, while this is taking place ... A group has been
formed called COST (Committee On State Taxation). There are some heavy
hitters. A few of the members are: Microsoft, Prodigy, GE, GTE, IBM,
Compuserve, AOL and <smile> just to mention a few.

Anyone that would like further information may contact Suzanna Pilat
(•••@••.•••) or vist the web site:

The web site will be updated as more information becomes available.


Yet Another Industry Group Discovers They Better Get Involved -- Finally

People keep thinking that if they ignore government, it will ignore them.
How absolutely idiotic and naive.  Those who don't get involved, get

Date: Sun, 18 Feb 1996 12:46:50 -1000 (HST)
From: •••@••.••• (Daniel Cohen)


The Association of Online Professionals has joined with the Florida Chamber
of Commerce to fend off an attack by the state Department of Revenue that
could cripple Florida's online services industry and damage the state

"The state already collects tax on these services, but is looking for
additional revenues by double-taxing them," notes AOP Executive Director
Dave McClure. "Taxes are collected for every telephone call made to an
online service, and corporate income taxes are paid on subscription fees."

"The direct effect will be to drive thousands of online services in Florida
out of business," says McClure. "These are small, entrepreneurial Internet
Service Providers and BBS systems that will not be able to pass this tax on
to their subscribers and still stay competitive, not to mention the
additional administrative burden on these companies."

"The state is sending a message to technology companies to stay out of
Florida, and is punishing its own residents for making use of online

The tax sends an anti-business message, agrees Blake A. Wilson, executive
vice president of the Florida Chamber of Commerce. "High-tech companies
that want to grow and expand in Florida will turn their backs on the
Sunshine State ... as a place that is living in the Dark Ages when it comes
to business climate if this tax prevails."

Earlier this year, the Department of Revenue used a 12-year-old statute
taxing teletype services as justification for a 9.5 percent tax on all
online services. Following complaints by the Florida Chamber of Commerce
and the business community, the Revenue Department withdrew collection of
the tax, but has announced that it will begin collection again on July 1 of
this year unless the Florida legislature votes otherwise.

The 9.5 percent sales and gross receipts tax would apply to all
subscriptions, fees and electronic transactions in or from the state of
Florida. Provisions that allow local governments to add their own taxes
could push the rate as high as 17.5 percent.

The Florida Chamber of Commerce has organized a drive to keep the tax from
becoming law. Already in discussion with the Department of Revenue, the
Chamber will begin lobbying the state legislature when it convenes in three

The AOP has joined with the Chamber, working with AOP members and other
online professionals to alert Florida residents and motivate them to write
their legislators.

The Florida tax situation is being watched closely by other states hoping
to implement online taxes. California, Georgia and Illinois are among the
state considering similar measures.


It is imperative that the State of Florida understand the chilling effect
that this tax will have on the online industry there.

The state needs to understand that this will not only cripple the industry
there, but will lead to a great loss of revenues to the state from business
that goes elsewhere, industry trade shows that avoid the state and other
related losses. Florida also needa to know that online professionals will
not vacation in a state that is unfriendly to them.


AOP is working with the FLorida Chamber of commerce to collect fax and
e-mail messages that can be presented to the state legislature. Please take
the time to fill this out and send it, and encourage your subscribers to do
the same.

Florida professionals, your future is at stake.

[For info about what you can do to help, try •••@••.••• . --jim]

To add or drop GovAccess, email to  •••@••.•••  ('Subject' ignored)
with message:  [un]subscribe GovAccess YourEmailAddress (insert your eaddr)
For brief description of GovAccess, send the message:  info GovAccess

Past postings are at /cpsr/states/california/govaccess
and by WWW at .
Also forwarded to USENET's  by CPSR's Al Whaley.

 Posted by Andrew Oram  - •••@••.••• - Moderator: CYBER-RIGHTS (CPSR)
   CyberJournal:  (WWW or FTP) -->
 Materials may be reposted in their _entirety_ for non-commercial use.