IP: Tacoma's Internet Tax (fwd)

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

<H1>Tacoma's Internet Tax</H1>

<HR>
<H2>News Flash</H2>
The News Tribune on 7-8-96 has a
<A HREF=""http://www.tribnet.com/news/cytax.htm">http://www.tribnet.com/news/cytax.htm">
Front Page</A> story on this taxing issue.
<HR>
<P>

The City of Tacoma has sent out <A HREF="">demand letters </A>
to Internet Providers declaring that they are a "Network Telephone
Service" and are subject to a utility tax. <P>

If you have not received a notice yet, here is the scoop. <P>

This tax is levied at a rate of 6.38% on every dollar of revenue
derived from a customer located in the city of tacoma. It does not
matter where YOU are doing business.<P>

This tax was intended to be levied on real utilities such as us west. The
city of tacoma has expanded the scope to include telephone related services
such as answering services and pager companies. The have established a
precident of taxing non telephone companies by getting away with taxing
them. <P>

The really bad news is that EVERY city in Washington has the ability to
levy this tax and in fact Bellevue, Seattle and Spokane have already stated
that if Tacoma is successful they will begin demanding that this tax be
levied. Every internet provider will be required to report revenues and pay a
tax based on the zipcode of every customer. <P>

<I>A little history.</I> <P>

My role in this issue started in February of this year while employed in the
State Senate as an Aid to Sen. Bill Finkbeiner (R-45). It was brought to
the attention of the Senator by a constituent. <P>

I investigated the story and found out that it was indeed true. My
conversations with the City of Tacoma were very unproductive. The
person who came up with this tax idea stated that he could <B>"not let internet
providers go untaxed" </B>and refused to back off of his plan.<P>

I contacted the <A HREF="">State Department of Revenue</A>
to find out what there interpretation of law was and they did not agree
with Tacoma but has no athority over the City.<P>

My next step was to request an opinion from the
<A HREF="">Attorney Generals'</A> office. I finally received a
non-answer last week. The AG will not issue an opinion on
the interpretation because they feel that it is too close of a call and that
they feel that it will have to be settled in court.<P>

<I>What to do?</I><P>

There are several options available at this point. The first of which should
be a plea before the City Council. I am willing to organize a group meeting
with the council, but it will take a strong show of unity to go before them.
It should consist of several ISP's as well as users. <P>

If you would like to be part of this, either send me
<A HREF=""mailto:vince@web.wa.net">mailto:vince@web.wa.net">email </A>or you can
reach me voice at 922-3552 (tacoma) or 878-9282 (seattle). <P>

At this point there is nothing the Senator can do until the next legislative
session in January.<P>

You can contact Sen. Finbeiner via email at
<A HREF=""mailto:finkbein_bi@leg.wa.gov">mailto:finkbein_bi@leg.wa.gov">finkbein_bi@leg.wa.gov</A><P>

<hr size=3 width@0 align="center"><center><i>67 total hits since Wednesday
May 15. 10 hits today.
<br>Last access on Monday July 8 at 16:31:56 from inigo.cybernex.net<br>
Page was last updated on Monday July 8, 1996 at 14:41:37</i></center>