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Memo to Tech Firms: Grow Up
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Business New Haven
2/5/2001
By: BNH
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Readers of Business New Haven by now, we're sure, realize that we're not fond of taxes, particularly new ones. But we expect they also know that, like most of them, we favor fairness. For several years now, buoyed by the hype of the New Economy, one group of businesses has been gaining an advantage over others.
In October 1999, the federal Internet Tax Freedom Act (ITFA) became law. It imposed a three-year moratorium on the authority of state and local governments to impose taxes on Internet commerce. That moratorium is now about to expire, and we see no compelling reason to extend a ban on at least the application of sales taxes.
The argument for extending the ban was made by Gov. Gray Davis (R-California) "I do not favor the application of the sales tax for the Internet because I certainly don't want to kill the golden goose that is laying the egg." Well, we don't want to kill that goose, either - or any of the ducks on Main Street in Meriden or Branford.
Hype about Internet companies is just that. Others can hype Main Street, or the catalogue industry, or whatever. It really doesn't matter: The point is that any legislation that favors one group of businesses over another is bad, because it presupposes that government knows better than the marketplace what is right.
Here in Connecticut, the technology lobby is hard at work seeking special favors for companies. But we're sure that Nutmeggers already know that they are liable for use taxes on any taxable item - whether they buy it over the Internet or not. All businesses should support tax fairness and an even playing field. We hope that Internet and technology companies will stop seeking government help for their businesses.
It's just fair.
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