Even the Internet may not be able to avoid taxes.
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That dark cloud on the horizon is the controversial specter oftaxation on the Internet, and it's gaining strength. Stategovernments feel they are losing a rightful revenue stream. Localbrick-and-mortar businesses feel the tax-free Internet representsunfair competition. Internet sellers believe dealing with a myriadof tax laws in states where they don't have a physical presencewould be confusing and cost-prohibitive. They all have legitimateconcerns.
The current congressional moratorium on Internet taxes is set toexpire in November 2003. Meanwhile, the states have been talkingamongst themselves. Last year, 32 states approved modellegislation, dubbed the Streamlined Sales Tax System, that wouldtake giant steps toward cleaning up the tangle of state and localtax laws. Some large online retailers have already altered theirsales tax collecting systems to come into line with this agreementthat also allows them to avoid owing back taxes.
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