http://orlando.bizjournals.com/orlando/stories/2003/08/25/story1.html
Here is an article that actually documents the earlier information I got from
WFLA radio host Tedd Webb and posted when we were on the old mail server.
Smitty
Proposal would levy fees on most in-house networks
Chad Eric Watt
Senior Staff Writer
ORLANDO -- A new rule now being formulated in Tallahassee could lead to a
state tax of 9 percent -- or higher -- on computer networks commonly used in
businesses.
"The standard response is on the border between surprise and outrage," says
Arthur Simon, senior vice president of big-business lobby Associated
Industries of Florida.
The proposal has its roots in a legislative directive handed down two years
ago. It aimed to modernize how the state taxes communications.
"Most of Florida communications case law stems from the rotary dial era," says
David Bruns, spokesman for the state Department of Revenue.
Reforms passed in 2001 simplified how communications taxes were collected and
presented to taxpayers.
But how to define -- and whether to tax -- new sorts of communication devices
was left somewhat unclear in the legislation, Bruns says.
The proposed rule pushes the definition of communications systems to include
local area networks, or LANs, as well as wide area networks, or WANs, which
connect computers across distances. Practically any office with two computers
will have a local area network.
Associated Industries knew a rule was coming, says Simon. "What did surprise
the business community was the extent and reach of the rule," says the
lobbyist.
That brings them under the purview of the proposed rule, which includes
computer networks as "substitute communications systems" -- subject to a 9.17
percent state tax, plus local option taxes.
In Orange County, the local tax typically runs between 5.5 percent and 6.5
percent. That would bring the total tax to between 14-15 percent.
Computer networks would be taxed at that percent on either annual lease
payments or depreciation.
To be sure, the proposal is very preliminary. By putting it down on paper,
state rulemakers are hoping to hear from businesses and others on how it
would affect them, says the Department of Revenue's Bruns.
"We're hoping we get a lot of attention paid to this and understand what
impact would it have," he says.
Associated Industries is asking its members to complete a quick worksheet,
estimating how much tax they would pay under the proposed rule.
It's too early for a dollar figure, but its members are not pleased to see
more tax on their plates, says Simon. Should the rule go into effect, he
adds, the state Legislature could step in.
"I would not be surprised to see that the issue ends up in the lap of the
Legislature in the spring," says Simon.
For his part, Bruns says the department would like to hear thoughts from
anyone and everyone, even irate business and legislators.
"That clanging you hear is the machine working," he says.
© 2003 American City Business Journals Inc.
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