You know things are getting interesting when Carlos Guerra devotes his full Sunday column in the San Antonio Express-News to taxing Internet transactions. His Media Missed Key Issue of Tax Policy, printed on December 5^th ended with the question, 

The beginnings of an answer may already be on the books. There is a little known and widely ignored provision that may already cover the e-commerce transactions. If this other law is uniformly and economically enforced, the gap between local sales subject to the sales tax and transactions between local purchasers and out of state sellers will narrow considerably. 

The State of Michigan recently announced that it would ask its citizens to voluntarily report the value of purchases from out-of-state vendors. Then, the taxpayers would pay a six percent levy on the amount they report. Technically, such a tax is called a use tax; not a sales tax but the effect is the same. Only the collection is different. Every state that has a state sales tax has a corresponding use tax that requires voluntary reporting. 

Some background may be in order. A state generally has authority to impose taxes on visitors or transactions within its borders. Further, it can tax its citizens even when those citizens are outside its borders. As long as some connection between the state and the person or transaction exists, the US Supreme Court has upheld most of those levies. Lawyers say there must be a nexus or connection between the state's jurisdiction and the persons or transaction that justifies the collection of a tax. 

Enacting a tax is one thing, collecting it is another. 

Local retailers are taxed on their property—both real and personal. Further, Texas imposes a state sales tax on many purchases of goods or services. Texas cities and transportation authorities then may add local sales taxes to the 6¼% levy from the State. It does not matter if you are a resident of New York or a native Texan, if you buy something within the borders of Texas other than a few basic items, you will probably pay a sales tax. The nexus is found in the need for infrastructure, fire, police and the full range of state and local services. Collection is fairly easy within our borders—they come visit you with some stern looking tax agents. 

Conversely, the state will have both a practical and legal problem if it tries to force out of state retailers to collect Texas sales taxes just because the goods will be sent into Texas. Those same tax agents don't have any jurisdiction unless that retailer also has a location within Texas. 

The retailers have their own thoughts on the subject. There are more than 7,600 separate jurisdictions that could require them to collect taxes. The burden on small vendors that have opened an e-commerce site would be overwhelming. That is why there have been calls to limit the imposition of new taxes on electronic commerce transaction. 

President Clinton has made an Internet tax moratorium an administration priority. The Internet Tax Freedom Act has been in effect since October, 1998 and it generally provided:  

The law was designed to provide a breather while some permanent solution was explored. It did not keep states from collecting taxes that were already on the books. Michigan is boldly trying to collect. 

As I write this article, a commission established under that law is holding a series of meetings around the country. The next public session will be held in Dallas in March. The Advisory Commission on Electronic Commerce maintains an excellent website that provides an extensive library of articles and papers on the subject. That website also will provide the agenda for the Dallas meeting. 

Harley T. Duncan, Executive Director of the Federation of Tax Administrators has prepared a very good general outline on the issues and some of the facts involved in this taxation issue. It is at The Tech Center web page sponsored by the Law School at George Mason University, 

Most of the time when I'm searching for the answer to a legal question, I'm not looking for cute and glitzy. I do want a research site that is simple and well organized. Rominger Legal, Where Legal Research Begins on the Web is very close to what I need. 

Its strength is simple hypertext links organized into eleven categories and links to six search engines. The usual links to federal and state courts and legislation are present. It also has a category devoted to specific practice areas such as Bankruptcy, Employment, Federal Taxation and Health Care that appear to be very comprehensive. 

Add http://www.romingerlegal.com/ as a bookmark if you do any legal research. It is a good one. 

A federal court jury has convicted SabreTech (but not any individual) of recklessly handling the oxygen containers that are believed to have caused an intense fire aboard a ValueJet flight. The tragic result was the death of 110 persons on board. Additional criminal charges are pending in state court. 

The September column provided some thoughts on the effect such prosecutions might have on computer and software professionals. 

As more and more critical life functions are controlled by computer hardware and software, anyone in the development or manufacturing process should evaluate the liability that may attach if products are shipped to the market before they are ready. 

The SabreTech case indicates a willingness to hold corporations criminally responsible for accidents caused by faulty procedures.