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Tacoma tax vote on hold

Citizens and Internet service providers pack a Tacoma, Washington, City Council meeting, demanding the repeal of a potentially predecent-setting city tax on ISPs.

Citizens and Internet service providers packed a Tacoma, Washington, City Council meeting last night, demanding the repeal of a potentially predecent-setting city tax on ISPs.

But the council put off a vote on the closely watched issue until September 4.

The prospect of repealing the ISP tax in Tacoma, a city known for a pro-high-tech business attitude, is being watched throughout the country as controversial "tax the Net" campaigns gain momentum. Local ISPs throughout the country complain that not only are they being "double-taxed" because they already pay telecommunications tax, but that the taxes have a chilling effect on the burgeoning industry.

Not one of the 33 speakers in Tacoma spoke in favor of the tax, attendees said today. Council members seemed to be leaning for the repeal, called for by the mayor, said Gail Greenwood, a city of Tacoma spokeswoman.

But some were concerned that if they eliminated the six-month-old, six percent tax, other businesses, such as phone companies, also would ask that their taxes be repealed.

The tax on ISPs would generate an estimated $250,000 next year, while the taxes for phone companies bring in millions of dollars annually, Greenwood said.

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