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Internet Research Group Says Prepare For Online Taxes Despite Ban Extension

by Mike Godfrey, Tax-News.com, Washinton

23 November 2001


The Gartner Research Group has warned online businesses not to become complacent following the extension of the moratorium on online sales taxes, suggesting that the ban is at best temporary, and that online business models should be reassessed with this in mind.

According to Gartner, online businesses and e-tailers should prepare for the possibility that when the new ban expires in October 2003, internet sales taxes could become a reality. 'The continuance of the freeze on internet taxes- welcome albeit expected news to web merchants- should be no cause for protracted celebration,' explained Ron Cowles for Gartner. 'The Senate's action merely puts a finger in the leaking dike of online taxes.'

Gartner believe that claims that the imposition of taxes will kill e-commerce will lose their impact as the industry grows more vibrant, and that over the next two years, state authorities keen to impose regional sales taxes on e-tailers will exert more pressure, and mount a co-ordinated and organised campaign in order to convince Congress to rule in their favour next time around.

'Gartner predicted that the Senate would support extending the moratorium and that by 2003 the freeze would end. We were correct on the first and stand behind the second prediction,' Mr Cowles said on Tuesday.


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