This is a bit of old news, but apparently not everyone has seen it, so I'm passing it along.
Regards,
Norm
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Pataki vetoes Internet tax bill
Associated Press, 09/12/97 00:46
ALBANY, N.Y. (AP) - Legislation that would have exempted
Internet access services from taxes was vetoed by Gov.
George Pataki.
The bill would have provided the first such Internet
exemptions in the nation.
Pataki said Thursday that though he still supported the
Internet tax exemption, the bill passed by the
Legislature was flawed. It was not as broad as an
administrative ruling he had directed the state
Department of Taxation and Finance to draw up earlier
this year which would have exempted Internet access
charges from sales and use taxes as well as the
telecommunications excise tax, he said.
The bill drawn up to codify the tax department ruling did
not exempt the Internet services from the
telecommunications excise tax, Pataki said.
New York currently does not tax Internet services and the
governor's plan clarifies that they will not do so.
Of the states that have established Internet tax
policies, Connecticut, Massachusetts, Tennessee and Texas
are taxing Internet services and Nebraska has imposed a
Boston Globe Onlpartial tax, a New York state tax department spokesman
said.
The bill vetoed by the Republican governor also did not
contain other key provisions of the tax department
ruling, such as a clarification that New York-based
Internet providers which accept on-line advertising from
companies outside of the state would not have to pay
sales tax on the revenue from those ad sales. Also, the
out-of-state companies would not pay additional New York
taxes.
Providers had been worried that by carrying
advertisements for mail-order companies outside the state
they would be subject to state sales tax. The exemptions
were intended to make New York more attractive to
Internet providers.
In his veto message, Pataki directed the tax department
to work with legislative staff to develop a sound bill he
could sign.
There are currently 73 companies providing Internet
service in New York.