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Telecommunications Taxes imposed on Internet Services
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As of March 5, 2008, the AlternaTax software has been acquired by KPMG LLP. For more information about KPMG and AlternaTax, please visit http://alternatax.kpmg.com. KPMG LLP, the audit, tax and advisory firm (www.us.kpmg.com) is the U.S. member firm of KPMG International. KPMG International's member firms have 123,000 professionals, including 7,100 partners, in 145 countries.
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Some states treat Internet access charges as telecommunications services, thus subjecting them to often high telecommunications taxes. Tennessee and Wisconsin are examples. Because these taxes tend to be higher than other potentt growth in online activity, including both Internet usage and the development of new networks. A further complication in the application of telecommunications taxes to the Internet is the disparate treatment that results from the current lack of uniformity in the application of such taxes to different forms of Internet access. Because of this, the method of accessing the Internet (regular phone, ISDN, DSL, cable, wireless, satellite) can dictate the level of taxation for what is essentially the same Internet service. This, in turn, can create unfair advantages or disadvantages for various market participants, as well as users.
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