ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, November 22, 1996 TAG: 9611220055
SECTION: BUSINESS PAGE: A-10 EDITION: METRO
DATELINE: WASHINGTON
The Clinton administration is telling the cyberworld: No new federal taxes on the Internet.
In a 46-page policy report Thursday, the Treasury Department said its guiding policy on taxing electronic commerce was neutrality, and ``neutrality rejects the imposition of new or additional taxes.''
The report goes on to discuss a range of difficult questions surrounding the rapid growth of electronic commerce.
Traditionally, a service is taxed at the location where it's rendered. But, what if a consultant offers services over the Internet? Is the transaction taxed where the information is posted to a Web page, where the information is down-loaded from the Web page or where the computer serving the Web page is located?
Another issue concerns whether a tangible product, such as a book or photograph or musical recording, is converted into an intangible product when it is digitized and transmitted over the Internet. How should the transaction be taxed?
The Treasury Department, according to Glen Kohl, deputy assistant secretary for tax policy, is seeking to open a discussion on the topic, rather than issue policy pronouncements. Above all, it wants to make sure government policy doesn't impede growth in the rapidly developing field.
``We think electronic commerce is to be encouraged, and we want to make sure the tax system doesn't get in the way,'' he said.
LENGTH: Short : 36 linesby CNB