NY reverses stand on "Cybertax" (fwd)

[David Farber <farber@central.cis.upenn.edu>]

Forwarded message:
>From 76407.3521@compuserve.com Thu Oct 21 22:57:15 1993
Date: 20 Oct 93 22:25:14 EDT
From: Marty Winter <76407.3521@compuserve.com>
To: "SEA.LIST" <sea-list@panix.com>
Subject: NY reverses stand on "Cybertax"
Message-Id: <931021022514_76407.3521_FHA36-1@CompuServe.COM>




    DATE    : 1019
    TIME    : 0017
    CATEGORY: SRAP


TITLE        PM-NY--900Numbers          10/19/93  12:17 am


CONTENTS    PM-NY--900 Numbers,0283<               R


        Tax Commissioner Reverts To Narrow Interpretation of Telephone Tax


TEXT       ALBANY, N.Y. (AP) - The state tax commissioner has reversed
        himself and said that a new sales tax on telephone lines will only
        be imposed on services such as phone sex lines and not on computer
        networks.


           Earlier this year, the Legislature approved an additional 5
        percent sales tax on information and entertainment services
        delivered by telephone.


           The idea was to tax 800 and 900 lines that provide entertainment
        like adult phone services, tarot card readings and soap opera
        updates. The law went into effect Sept. 1.


           But Commissioner of Taxation and Finance James Wetzler said
        Monday the law was written too broadly, and would apply not only to
        900 lines but to computer networks, such as Prodigy, that work
        through phone lines. That caused protests from businesses affected
        by the tax.


           After consulting with lawmakers and representatives of the
        telecommunications industry, Wetzler has decided to impose the tax
        only on telephone services that are received aurally, Wetzler
        spokesman Karl Felsen said.


           Lawmakers estimated the tax would raise $10 million during this
        fiscal year.


           ''The way technology has developed, what goes over the telephone
        is expanding every day,'' Felsen said. ''Although it was clear what
        the Legislature wanted to tax, it wasn't clear the way the law was
        written.''


           But a spokesman for the Republican-controlled Senate said the
        incident showed Wetzler is ''a little overanxious to increase tax
        collections.''


           Attorneys for the tax department helped write the law, so
        Wetzler's ''motives in trying to interpret this tax so broadly are
        certainly suspect,'' GOP spokesman Chris McKenna said.


END OF TEXT