Tax moratium expires, though likely to be revived
October 14, 2001
By JIM BROOKS
A federal moratorium on Internet-related taxes expired today, despite
the efforts in Congress to extend it.
The ban, which was approved in 1998, prevents state and local
governments from imposing new taxes on Internet service providers and
electronic commerce sites.
The U.S. House of Representatives had approved an extension of the
ban recently, but the Senate has not approved either of two versions
of bills introduced earlier this month. The recent anthrax scare shut
down congressional activity for several days on Capitol Hill.
The ban does not affect sales tax on e-commerce Web sites.
Consumers who buy items online are supposed to pay taxes to their own
state, even if the Web site from which they purchased goods didn't
charge them. However, few states have tried to collect sales taxes on
these sorts of purchases, or force consumers to pay up.
Many state officials believe they are losing considerable sales tax
revenue because e-commerce Web sites are only required to collect
sales tax on sales in states where they have a physical presence.
E-commerce proponents say with hundreds of taxing districts to
consider, the burden to charge the proper amount sales tax on all
sales -- and determining where to send those taxes -- would be too
high, and might slow the growth of sales on the Internet.
Some tax proponents have suggested streamlining sales tax collections
for online sales, which would reduce the burden on those who must
Sales tax means a lot to some states, like North Dakota, because the
state has no income tax, and depends largely on sales tax to help
fund state coffers.
The Senate is likely to extend the moratorium in coming weeks. The
debate on sales tax will continue, though online sales still remain
only a fraction of most offline sales.
HIGH ANXIETY. Americans' concerns and questions about anthrax
have sent traffic numbers at government Web sites skyrocketing.
The Center for Disease Control and Prevention site saw traffic jump
by 118 percent a couple weeks ago, with more than half a million
Nearly 60 percent of visitors were looking for information on the
symptoms, diagnosis and treatment of anthrax infections.
The posing of 22 Most Wanted Terrorists sent traffic to The Federal
Bureau of Investigations' Web site up by 518 percent, with more than
900,000 unique visitors.
Sixty-seven percent of the site's visitors visited Web pages related
to the 22 terrorist. Twenty-five percent sought information on Osama
To check out the CDC and FBI sites, visit www.cdc.gov and www.fbi.gov.
BROADBAND EXPANDS. Despite the problems that some broadband
Internet providers have faced in the past year or so, the market for
consumers will continue to grow in coming years.
A recent report by Jupiter Media Metrix predicts that more than 40
percent of U.S. households that go online by 2006 will do so with a
broadband Internet connection -- which includes cable Internet, DSL
It is easy to believe that DSL would be the leading connection
method, since DSL uses existing telephone lines coming into homes,
and nearly every home has a telephone.
But Jupiter predicts that cable modems will serve the majority of the
35.1 million homes with broadband Internet access.
In its study, Jupiter found that consumers with broadband access use
the Internet is slightly different ways.
For example, broadband users are more likely to download music,
listen to music online or watch streaming video. Broadband users are
also more likely to do their personal banking online, and manage
their stock portfolio online.
WEBRING-LESS. Yahoo! announced recently it has sold its
community network WebRing to Tim Killeen, one of the engineers who
created the system years ago.
If you've visited a Web site and seen the familiar WebRing
information box at the bottom, then you're aware of WebRing's
service, which created online communities and allowed sites with
common content and interests to link.
The move comes as Yahoo! tries to focus on its services that generate
revenue -- or have the potential to do so.
WebRing members must transfer their sites to the new WebRing, though
that only takes a few minutes at the Yahoo! WebRing site, http://webring.yahoo.com.
If the sites aren't transferred, they'll be lost and must be
re-registered, according to the WebRing information page.