356 lines
19 KiB
Plaintext
356 lines
19 KiB
Plaintext
The follwoing few replies are taken with permission from Channel One,
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the largest BBS system in the North East (its a RIMENet system) which
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is suffering at the hands of the Massachusetts Department of Revenue
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and which needs help.
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The state is trying to claim non-existant taxes on them, including a
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per-message post tax. If these goe thru they will affect EVERY modem
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user in Massachusetts and eventually the Northeast (once the other
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states discover they might get away with it) and trash bbsing in
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general by the time they finish enforcing it.
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Note that when these messages refer to SYSOP they are referring to
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the sysops of Channel One (a husband and wife team in Cambridge MA)
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and not myself or any sysop on this network.
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===========================================================================
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BBS: Channel 1(R) Communications [ V.32bis ]
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Date: 08-10-93 (02:17) Number: 4312
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From: JIM LEONARD Refer#: NONE
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To: ALL Recvd: NO
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Subj: Fight Back-Modem Tax! Conf: (16) MassModemT
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---------------------------------------------------------------------------
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Hello Modem Users: I've just read these posts about the State of
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Mass. laying taxes upon the BBS known as Channel 1. Part of the state's
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plan is to use an unpublicized Use Tax schedule and charge back three
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years worth of penalties to the tune of some $100,00.00. The second part
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of that state's planincludes an experiment involving a "message transfer
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tax" Every time a caller sends a message "ba-da-bing" goes the tax meter.
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Contrary to many users' opinions, THIS IS NOT A HOAX!
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I am here to ask every one of you to join me, in the formation of an
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"International Association of Modem Users" (IAMU). The goal is to provide
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a vehicle that will collect and distribute information about "modem taxes"
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and other issues that burden Sysops and Modem Users. Together, as a
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united association of "modem users", we can work together to protect our
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right to "Free Speech". Only as an organized and cohesive group, can we
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repel the efforts of various local, state and national govt bodies to
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implement similiar MODEM & BBS TAX MEASURES upon all of us.
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PLEASE DO NOT HESITATE TO JOIN ME IN THIS EFFORT.
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It demands the full support of all Sysops, Network Administrators,
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Moderators and Modem Users. This is a serious undertaking that will
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require a lot of time and effort.
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The First Task is to solicit information from ALL OF YOU. I need
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to see and hear, that you, as a modem user, feel these issues are
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important enough to donate some of your time and energy. Unless YOU
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are willing to help, this association will not succeed.
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Consider the time and benefit you receive from your favorite Bulletin
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Board Systems. Consider the contacts you have made "on-line" and the
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knowledge and ideas you have shared electronically with others. These
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"freedoms" that many of us take for granted will become "luxuries" unless
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we stake our claim to "Free Speech", today.
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If your local bell company had their way, you would be charged for every
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word you type into your phone line. And every local, state and federal
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government tax collector would be right there to "get their share", right
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off the top. Why should they? Do they deserve it? Are they just
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automatically entitled to make money off of your desire to communicate
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with others? NO WAY!
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This is YOUR world. YOU have a right to say when and how and where
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you allow the government to intercede. If the FBI had their way, they
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would have InterNet feeds coming into their central offices reading every
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message you write. NOW is the time for all modem users to unite as a
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single entity to stop the intrusion and the taxation. This association
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has the potential of including millions of modem users, around the world,
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from all walks of life. The only common thread is a modem and a desire to
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communicate with others without -outside- interference.
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Think about what has been posted here. If you agree with anything
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that is being said, then I urge you to communicate your thoughts to me and
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to your local BBS and to other modem users that are part of your world.
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Don't just stand around "thinking" that these "modem taxes" are a hoax or
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a joke. THEY ARE FOR REAL AND YOU ARE GOING TO START PAYING FOR THEM
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UNLESS YOU ACT NOW AND ACT POSITIVELY TO DO SOMETHING TO HELP!
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My E-Mail Addresses via Internet:
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searchnet@delphi.com or 72764.3012@compuserve.com
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Or as "Jim Leonard", on Channel 1 BBS. To voice your concerns or to
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register your support call 206-781-7754 (Seattle, WA - USA). I will
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add your name and E-Mail Address for electronic distribution of bulletins
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concerning "tax modem" issues & to discuss how you can volunteer to help
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fight these taxes. Information you provide will be held in confidence
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and will NOT BE RELEASED TO ANYONE ELSE, FOR ANY REASON - PERIOD.
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signed, James Leonard - August 6, 1993
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-------------------------------------------------------------------------
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IAMU-International Association of Modem Users-All Rights Reserved
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(C)opyright-August 6th, 1993-James Leonard, Seattle, Washington, U.S.A.
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-------------------------------------------------------------------------
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MAY NOT BE COPIED FOR COMMERICAL PURPOSES. May be copied in it's
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entirety, for uploading to other BBS's and for Modem Users to share for
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educational purposes only. s/James Leonard, searchnet@delphi.com
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-------------------------------------------------------------------------
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* WinQwk 1.30 #0 * Unregistered Evaluation Copy
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===========================================================================
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BBS: Channel 1(R) Communications [ V.32bis ]
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Date: 08-13-93 (21:54) Number: 4313
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From: SYSOP Refer#: NONE
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To: JIM LEONARD Recvd: YES
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Subj: COMMENT (57) Conf: (16) MassModemT
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---------------------------------------------------------------------------
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Jim,
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Good to hear from you.
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We'll try to get back to you on the items you asked about yesterday today.
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You mentioned to me in another message you wrote me earlier today
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that all the people you've talked to about this agree that the
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Massachusetts DOR is screwed.
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We feel this is ultimately what the whole thing boils down to.
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The Massachusetts DOR has been happily strong-arming and intimidating
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small businesses thru out the State for years, and then we wonder why
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Massachusetts is lagging the whole country pulling out of the recession!
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The MA DOR's operations depends on:
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1. Their IMMUNITY from frivolous claims.
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2. Incredibly mis-written and scrambled tax code which they present to the
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legislature.
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3. Giving meanings to the above that NO literate thinking person
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could conceivably read into the tax code.
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3. Putting one or two well-known but SMALL (i.e. defenseless) businesses
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under their VISE (since only large businesses can afford to take them
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to court) and getting the little guys to "roll over."
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4. Setting a new precedent by fear and example thereby for the whole industry
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at issue.
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It's truly disgusting!
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Other New England states (Connecticut comes to mind) have some of the
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most regressive sales tax clauses on the books anywhere vis a vis
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modem users. At least CT is up front about it -- Connecticut's code
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comes right out and taxes information databases. Massachusetts code
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as it is written explicitly exempts same --- but we have discovered,
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the MA DOR is trying to get around the exemption by inventing absurd
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"re-interpretations" of the code (at least until they get someone to
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"fall" for it.) Then they will have the precedent in their pocket
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(or a dead industry) - depending on how you look at it.
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Tess
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PS: The Use tax is a prize example of a state tax (that may not be
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Constitutional) - written to apply to every RESIDENT, but neither
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publicized by the State nor enforceable -- EXCEPT to businesses and
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professionals -- most of whom, like the rest of the residents,
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unaware of the law's existence.... Auditing small businesses for
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"compliance" to this law has become a "pot of gold" for the MA DOR
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over the past few years as they collect the back tax with 18%
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interest, strewing bankruptcies and "closing our shingles to relocate
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in another State" in their path. Channel 1 WILL survive this
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assessment, but it's another example of the generic evil in the system!
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===========================================================================
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BBS: Channel 1(R) Communications [ V.32bis ]
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Date: 08-12-93 (15:50) Number: 4315
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From: SYSOP Refer#: NONE
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To: ALL Recvd: NO
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Subj: What the DOR is up to Conf: (16) MassModemT
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---------------------------------------------------------------------------
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Folks,
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We've been tardy to communicate to you what the DOR has been telling us
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via the field auditor (who is the only person there who talks to our CPA)
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during the latest round.
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Since "Entering a message or messages" is a telecommunications "transmission"
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(Don't ask me exactly how they pulled this out of the regs, but this is the
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focus of their case right now and a fine example what a full time staff of
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50+ lawyers is capable of coming up with!), therefore
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Channel 1 (i.e. any bbs or any "interactive" online service or by extension
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any provider of access to the Internet) is a "telecommunications" transmittor.
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As such Channel 1 should:
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1. Stop paying the sales tax on its own 85+ telephone lines
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2. Collect tax from that portion of its fees which is "entering messages"
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(This would be established somehow as a percentage of total revenue
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from the access fees and Channel 1 would have to figure out how to collect
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the assessment from its Members).
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Our CPA (the sales tax specialist) has documented the folly and
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impractability of accounting for this at Channel 1 -- 50% of the users live out
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of state; e-mail uploads/downloads are unlimited i.e. not specifically charged
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at all to Members; non-paying Members can enter messages; many Members never
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read a message; many Members read only; etc. Assuming that it can be
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established that say 3% of the activity on Channel 1 is specifically due to
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Massachusetts residents who are paying Members uploading their Mail packets,
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the DOR would collect less revenue from Channel 1 than they do now from the
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collecting the tax on our phone lines. Also that DOR's legal staff seems to
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be ignoring that " message services except for beeper services" are
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specifcally exempt from the sales tax in a late 1990 internal DOR document
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SIC7389 clarifying for its personnel the status of sales taxable items as a
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result of the 8.90 new regs. You figure....
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Howbeit, you and we cannot fail to see the DANGEROUS precedent and
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implications! And why this alert continues to be very REAL.
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It was about a month ago that the DOR communicated this "status" report -- the
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field auditor said he'd be pre-occupied with other cases until August. Now he
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is on yet another vacation.... The DOR still refuses to talk to anyone in the
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press about any of this and the press is reluctant to write anything without
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getting the DOR's "point of view". The DOR is tentatively developing its
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"position" until the end of this year. They ARE working on "revisions" to the
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telecommunications regs - relentlessly looking for ways to cash in on the
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information revolution.
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The DOR is probably not going to decide for months whether to assess Channel 1
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1. All of its access fees since it hasn't been billing customers as per above.
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2. Come down with the "entering a message" assessment - to force court case
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or a precedent. (I'm sure they assume that Channel 1 would
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"roll over" - since the court case would bankrupt us)
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3. Decide that "message entering" on Channel 1 represents an inconsequential
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percentage of revenues that are already being collected via tax we
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pay on our phone lines.
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Although some of these possible outcomes are better than others vis a vis
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Channel 1's survival, the mindset behind ALL of them bodes badly.
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The State has to clarify its economic policy looking ahead to the next century.
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Right now, it's the DOR calling the shots!
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===========================================================================
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BBS: Channel 1(R) Communications [ V.32bis ]
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Date: 08-12-93 (16:17) Number: 4316
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From: BILL WOOD Refer#: 4315
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To: SYSOP Recvd: YES
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Subj: What the DOR is up to Conf: (16) MassModemT
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---------------------------------------------------------------------------
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Another concept that the DOR will have to invent a response to, id that
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there is no fee for posting. Since this can be done by none members and
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in fact is encouraged that non-members post, it is difficult to assign a
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large portion of the membership fee to an activity available to
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non-members. Members contribute to gain additional time, avoid ratios,
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and, primarily, to keep good BBSes on the line. The last reason
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approaches a gift or charitable contribution. Oh well, they are probably
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working on an approach to taxing that. Do you wonder why Massachusetts
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is home to so many tax exempt organizations?? We have to do *something*
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and the are running the taxpaying organizations out with their attitude
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towards taxation.
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By the way, the communications use tax is on the books. This way anyone
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receiving a taxable phone call in Massachusetts (i.e. any phone call not
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made as part of basic residential service and on which a tax less than
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that of Massachusetts was paid on the originating end) is liable for
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filing a use tax return. Of course, the DOR would *never* enforce as
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silly a law as this, that is, unless they want to destry you for some
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reason. In that case, you are clearly violating the laws of the
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Commonwealth, not paying your fair share.
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===========================================================================
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BBS: Channel 1(R) Communications [ V.32bis ]
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Date: 08-13-93 (17:59) Number: 4317
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From: SYSOP Refer#: 4316
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To: BILL WOOD Recvd: NO
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Subj: What the DOR is up to Conf: (16) MassModemT
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---------------------------------------------------------------------------
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-> By the way, the communications use tax is on the books. This way anyone
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-> receiving a taxable phone call in Massachusetts (i.e. any phone call not
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-> made as part of basic residential service and on which a tax less than that
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-> of Massachusetts was paid on the originating end) is liable for filing a use
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-> tax return. Of course, the DOR would *never* enforce as silly a law as this,
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-> that is, unless they want to destry you for some reason. In that case, you
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-> are clearly violating the laws of the
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Oh but they have enforced it in a rather big way recently on
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5 Boston Law firms! Not all of the WESTLAW/LEXIS etc legal
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database services (ALL of which are located out of State) have
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been collecting Sales tax for the Commonwealth on their
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"leased" phone lines or "itemizing" their bills the way the State
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telecommunications law requires for the leased line access portion of fee.
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The State has not gone after WESTLAW or LEXIS or whomever, as it has
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the right to collect however is more convenient for IT - the vendor
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or the seller.
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They've gone after a group of MA lawyers - said they should have been
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declaring the USE tax on all their database bills since 8.90 with the
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18% monthly compounded interest, and probably additional penalites
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in some cases.
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The lawyers met their match! The burden of proof was on them
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They had to document EACH and every vendor's policy.
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Teach the DOR which vendors WERE billing correctly and collecting
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the tax on the telephone portion of their bill (i.e. where they HAD
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paid the telecommunications tax already) and where the vendors
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were ignoring MA regs requirements.
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And the the resolution has been that it is the MA lawyers who MUST pay every
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penny as per above where the vendors failed to collect properly.
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This case has been running concurrent with Channel 1's.
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It illustrates your point perfectly!
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It suggests that next, they'll go after every MA business's Compuserve
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account?
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===========================================================================
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BBS: Channel 1(R) Communications [ V.32bis ]
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Date: 08-12-93 (16:51) Number: 4318
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From: CHRIS DONNEGAN Refer#: 4315
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To: SYSOP Recvd: YES
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Subj: What the DOR is up to Conf: (16) MassModemT
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---------------------------------------------------------------------------
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S >Folks,
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S >
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S >We've been tardy to communicate to you what the DOR has been telling u
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S >via the field auditor (who is the only person there who talks to our C
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S >during the latest round.
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Has the EFF been of any assistance?
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===========================================================================
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BBS: Channel 1(R) Communications [ V.32bis ]
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Date: 08-13-93 (19:24) Number: 4319
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From: HAROLD DRABKIN Refer#: 4315
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To: SYSOP Recvd: YES
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Subj: What the DOR is up to Conf: (16) MassModemT
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---------------------------------------------------------------------------
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BM>Channel 1 (i.e. any bbs or any "interactive" online service or by extension
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BM>any provider of access to the Internet) is a "telecommunications" transmitto
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BM>As such Channel 1 should:
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BM>1. Stop paying the sales tax on its own 85+ telephone lines
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Do does THAT mean that Channel1 is owed a refund of the sales tax on
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it's phone lines since it's begining?
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<20> SLMR 2.1a #843 <20> F.I.A.W.O.L. because Fandom Is A Way Of Life.
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===========================================================================
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BBS: Channel 1(R) Communications [ V.32bis ]
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Date: 08-13-93 (21:49) Number: 4321
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From: SYSOP Refer#: 4319
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To: HAROLD DRABKIN Recvd: NO
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Subj: What the DOR is up to Conf: (16) MassModemT
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---------------------------------------------------------------------------
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-> Do does THAT mean that Channel1 is owed a refund of the sales tax on it's
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-> phone lines since it's begining?
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That's a really good point and the one that may persuade the DOR to
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maintain the status quo....
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As we MEASURE the online activity:
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"Massachussetts paying Member uploading messages on Channel 1"
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-- it is becoming clear that this constitutes a tiny amount of the total
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activity on the system.
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But it's anyone's guess what "spin" or "angle" the DOR will attempt
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to put on the "regs" next .....
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