New Tolls On The Info Highway?

States see big revenues in cyberspace

For cybernauts in Spokane, Wash., it was a rude awakening. On Jan. 15, revenue-hungry town officials proposed a 6% tax on gross receipts of Internet access providers. Spokane City Councilman Chris B. Anderson, a foe of burdensome business taxes, blew his stack. "This is a money grab on an embryonic industry that's only now becoming viable," he says. That afternoon, Anderson contacted local Net service companies to mount a defense, and one firm set up a Web site for users to blast the plan. The mayor's office and city council were flooded with E-mail and phone calls. Grassroots reaction was so strong Spokane decided to delay the new levy pending further study.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.