Chapter 3 - Types of Taxes Other Than the
Federal Income Tax
Updates
What Is a Tax? Today, a
controvery exists over whether the "E-Rate" is
a fee properly imposed by the Federal Communications
Commission, or an improperly imposed tax. In 1997, the
FCC exercised its authroity under the Telecommuncations
Act of 1996 to provide universal service, by imposing a
charge on all telecommunications carriers providing
service between the States. This universal service
initiative is primarily designed to provide benefits to
elementary and secondary schools, public libraries, and
rural health care providers. On August 4, 1998, a hearing
was held on the fee versus tax issue by the Oversignt
Subcommittee of the House Ways & Means Committee.
Joint Committee on Taxation Report
- describes the e-rate, and provides legal
background to the tax versus fee issue
Testimony
from August 4, 1998 Ways & Means Committee
hearing
Electronic Commerce
E-commerce has raised a variety of issues as to how state
taxes apply to certain transactions. For example, is a
software vendor required to collect sales and use tax
from customers in states where the vendor's web page can
be accessed - is that a physical presence as required by
the Quill decision? What if the vendor operates
from a virtual mall and the mall owner provides
advertising and other assistance to the vendor - does the
vendor now have nexus where the virtual mall owner
resides? Another example: Customer lives in California,
travels to Missouri and while there, accesses the
Internet and orders books from a vendor in Washington and
has them delivered to her father in Florida - which state
is entitled to any income and sales tax owed on this
purchase?
For more information on electronic
commerce issues see Chapter 18.
Links to more information on types of taxes
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Last updated on September 1,
1998.
Tax Aspects of Business Transactions: A First Course, by
Annette Nellen
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