At 04:08 PM 9/30/96 EDT, E. Allen Smith wrote:

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INTERNET BEWARE: GOVERNMENTS ARE SMELLING A RICH NEW SOURCE OF TAXES Copyright © 1996 Nando.net Copyright © 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.

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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.

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"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