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E-Commerce Taxation, Continued

Death and Taxes

As much as I hate to see sales taxes come to the Net (they are inherently regressive, and among my least-favorite forms of raising revenue for public services), I think it's inevitable that we'll see some kind of national tax system applied to Web sales. I think the requirement for simplified and standardized state and local sales taxes is about the best we can hope for -- and better, by far, than a national sales tax, which is a real shop of horrors.

There are serious questions about whether taxes on Net sales would be enforceable. It would be trivially easy, for example, to move Web vendors' legal and maybe physical presences offshore, where they would be beyond the reach of the tax man.

That would put the onus of reporting and paying taxes on items purchased over the Web on you and me, as the ultimate purchasers. Which is, in fact, the case today, since virtually every state which assesses sales taxes also includes in its enabling legislation "use taxes," under which you are required to report to the state, quarterly, anything you buy that somehow escaped taxation at the time it was bought -- and then cough up to the state exactly the same amount you'd have paid if the transaction had been taxed.

I'm sure you do that now. Religiously. Every quarter. Right?

You get the idea. Net taxes can be a can of worms, and I think we're going to see a decade of argument, evasion and legal wrangling before this issue is finally settled.

But come what may -- and whether or not I like it -- some form of transaction tax is coming to the Net.

And that will hurt B2C outfits. Today, many of us see the lack of an e-commerce sales tax as offsetting the shipping charges levied by Web retailers. Crank a tax back into that transaction, and I'll more often run down to a local retailer for something I'd otherwise have bought on the Web.

You too, I bet.

The ACEC meets again in Dallas in March to draft its final report to Congress. We'll tell you what happens then.

In the meantime, if you're a letter writer, start cranking out those missives to your congressional representatives and senators, letting them know what you think about this issue.

I don't think Congress is going to act on the ACEC's recommendations, whatever they may be, this year -- not in an election year, and not on an issue so incendiary as "new taxes." Besides there are powerful forces in the Congress -- such as House Majority Leader

Dick Armey

-- who say they are unalterably opposed to Net taxes.

But Congress won't wait forever. And in the end, I fear, it will adopt a scheme which permits states to tax Net transactions.

Super Bowl Spots Sputter

The game was great, but most of the dot-com Bowl commercials yesterday were pretty sad stuff. I thought that overall, the bricks-and-mortar folks trumped most of the dot-com firms pretty soundly.

Tech Savvy:

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TSC message boards.

The emotional high point of the

Super Bowl XXXIV

commercials was



classy spot on the possibilities of medical research in the years ahead, in which a digitally created but very believable

Christopher Reeve

walks onstage, followed by a host of other spinal-injury victims given new lives by medical breakthroughs.

Classy, Nuveen. Makes me feel good about bond salesmen.

Among the Net advertisers, I thought



pretty much wasted its money -- especially on the "E*Trade Halftime Show," a gussied-up version of the current millennium-focused show over in Orlando at

Disney World

. But E*Trade's nicely cynical "money-coming-out-the-wazoo" spot made me laugh. And

got it about right with its self-labeled "worst TV commercial of the game."

Once again,

came out on top, and the margin between its innovative, interesting spots and those of competitor


was even greater than last year.


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Mountain Dew spots were hilarious and, almost uniquely, made me remember the sponsor.



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gentle, understated spot featuring a veterinarian who leaves a fancy-dress dinner to deliver a Clydesdale foal was a welcome and overdue update of its ongoing "animals" theme. I hope those damned frogs finally slipped off their log and drowned.

Jim Seymour is president of Seymour Group, an information-strategies consulting firm working with corporate clients in the U.S., Europe and Asia, and a longtime columnist for PC Magazine. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. At time of publication, Seymour was long E*Trade, although positions can change at any time. Seymour does not write about companies that are, or have been recently, consulting clients of Seymour Group. While Seymour cannot provide investment advice or recommendations, he invites your feedback at