HTMLGOODIES EXPRESS (tm)
Auguat 21, 2000-- Newsletter #94

By Joe Burns

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HTMLGOODIES EXPRESS (tm)
Auguat 21, 2000--Newsletter #94
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Please visit http://www.htmlgoodies.com
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Greetings, Weekend Silicon Warriors,

Did you hear

The Artist formerly known as Prince is online at http://www.npgonlineltd.com and he's using the forum to make a pro-NAPSTER statement. He writes that the future will B digitized.

In more music download news, employees at the State Department have been blocked from downloading MP3 files through any source. It's not copyright concerns either. It seems an employee attempted to send a file from his home to his work, but the file was so large that is clogged the pipe while others were trying to do their work.

There's a new number two. Linux passed Novell NetWare in 1999 becoming the second most sold server system, behind Windows NT.

In addition, a company called BugTraq has released its list of vulnerabilities in operating systems. NT leads the way with a total of 99 different methods to break in. Red Hat (and the other Linuxes) comes in second with 87.

Remember the newsletter I wrote, not too long ago, that stated that women were quickly becoming equal in numbers to men on the Internet? Well, not any more. Now they make up the majority. According to Media Metrix and Jupiter Communications, women now comprise 50.4% of the Internet audience.

Now onto today's topic

Let's say you buy something on the Internet. It's nothing special, just a book, or a piece of hardware. You put in your credit card number, the transaction takes place, and your merchandise shows up at your door in a few days.

That seemed easy enough, just one question though

Where did the sale take place?

Did in happen in your town? Did it happen where the server is located? Did it happen where the company that packaged the merchandise is located, or did it happen where the actual company is located?

The answer to that question matters greatly in terms of both tax and responsibility. Those of you who have either looked into, or started, an e-business know that the answer is a bit of a quandary to local governments. Many would like to collect tax on all purchases and sales made within their boundaries, but cannot. The interstate commerce law forbids it.

It's all confusing, this question of ownership of the sale itself. It took me a good three days of calling around to accountants and the state to get a solid handle on how an Internet business is taxed, at least in Louisiana, where I am living now. Your laws may differ so don't use this as your definitive guide.

I do not pay a use tax on merchandise because I am importing to sell. Any sale where the buyer is outside of the state lines is protected under the interstate commerce laws and tax is not charged. Any sale within the state lines is subject to state sales tax and parish taxes. You probably know a parish as a county. Not only that, but the parish taxes are due in the parish where the sale took place.

For example, we'll say I live in New Orleans. That's Orleans Parish. I have a license to practice business here. If a person makes a buy from Springfield, Louisiana, in Tangipahoa parish, I will need to get a tax ID number from Tangipahoa parish and pay them their percentage. My local parish gets nothing because the sale took place outside Orleans parish. The state gets a cut no matter where the sale took place in Louisiana.

Sound complicated? It can be, especially because Louisiana has 64 parishes. I'll need to buy a new parish tax number for every parish that creates a sale.

So I'll ask you again, where did the sale take place? If the tax laws are any indicator, the sale took place where the user is located. After all, that is where the tax is to be paid, right?

I bring this up because, if that's the truth, then a person could possibly set up a Web site selling alcohol in a country that's dry, as long as he or she didn't sell to people within that county. Right?

I ask that question because a terrible conundrum has come up involving Yahoo, the French Government, and some Nazi paraphernalia a person has put up for auction.

Two Paris human rights groups have filed suit against Yahoo stating that the auction of the Nazi items breaks France's laws that forbids the selling of anything that might incite racism. These items certainly have that power. Add to that the US constitution, Yahoo is located in California, that protects the rights of free speech and you have two sets of laws that are at loggerheads.

Now, you're the judge. What would you rule here?

A French judge, Judge Jean-Jacques Gomez, ordered Yahoo to pay fines and find a method of blocking all French used from seeing the auction. That ruling was stayed until a three-person panel could look into how to block someone from the auction. A ruling will come November 6th.

So the matter remains unanswered since no formal ruling has been set. The person who is attempting to sell the items is responsible for putting them up. There was no mention of where that person was located. Yahoo is responsible for putting the items on the Web. They have already gone as far as pulling the auction down from their French site, fr.yahoo.com. The auction apparently stayed on the main Yahoo server, which is still visible from France.

What if the person who buys the items isn't in France? It seem that the law leans towards where the purchase is made being the area that stands to benefit tax-wise. Shouldn't that be the final concern?

Does a country have the ability to tell a server system in another country to do one thing or another?

Does a judge in France have any power what someone does in the U.S. even though what that person does in the U.S. may offend people in France?

These are the questions that will start to come up more and more as people put more and more commerce on the Web. Domestic buying and selling seems pretty easy to get a handle on, but commerce between countries is far more difficult.

>>>>>>>>>>>>>>>>>>>>

That's that. Thanks for reading. It makes the writing that much easer when you know someone will run their eyes over the words.

Joe Burns, Ph.D.

And Remember: A lot is being made of older Navy vessels since the raising of the Confederate submarine H.L. Hunley off the coast of South Carolina. I just thought I'd add one to the many I've heard. The U.S. frigate Constitution was nicknamed Old Ironsides. Contrary to the name, the ship's hull was constructed in 1797 entirely out of wood. The nickname came after the ship survived numerous battles, including the War of 1812, with little or no damage to the sides.

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