A PROMISE TO KEEP: 5%
A Ballot Committee of
Citizens for Limited Taxation & Government
PO Box 408 * Peabody, MA 01960
Phone:(617) 248-0022 /(508) 538-3900 E-Mail: cltg@cltg.org
Visit our web-page at: http://cltg.org
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*** Promise Update ***
Friday, August 8, 1997

More Tax Cuts Proposed
The Boston Globe
Friday, August 8, 1997

‘97 budget surplus brings a Malone call for tax cuts
Associated Press

Once again casting himself as prime defender of the taxpayer, Treasurer Joe Malone called for tax cuts yesterday after estimating the state recently ended its fiscal year with up to $685 million in surplus revenue.

Malone suggested using $300 million of that to expand the personal exemption on state income tax forms next year by an additional $100 per taxpayer.

"You can always find things that government can spend money on that are nice," Malone told reporters at the State House. "When you put $300 million into the hands of taxpayers, it does great things for the economy."

While legislative leaders conceded Malone’s estimate may prove true once the state completes its 1996-97 fiscal year ledger sheet in mid-September, they said they are considering smaller tax cuts and greater expenditures on onetime projects that will also benefit the taxpayer. . . .

Cellucci orders end to ‘Net provider tax
By Doris Sue Wong
Globe Staff

Amid the din of exhibitors hawking computer wares at the Mac-World Expo, Acting Governor Paul Cellucci found the friendliest of audiences for his latest policy pitch.

Cellucci said he is ordering an immediate halt in enforcement of a 5 percent state sales tax on Internet service providers.

"This 5 percent sales tax is an economic suicide wish," said Cellucci. "This moratorium sends the message to Internet service providers that Massachusetts wants them to stay and that Massachusetts will treat them well."

When the state passed the law in 1990 imposing the tax on telecommunications services, the Internet was the province, almost solely, of the technical insiders.

Since then, of course, it has become big news—and increasingly big business here and elsewhere. Last fall, in a blow to the prospects of local entrants into the field, the Department of Revenue informed the estimated 70 Internet service providers in Massachusetts that the tax did apply to them and the state would begin enforcing it.

While some providers, who believe the DOR was mistaken, began lobbying the Legislature and administration to pass legislation to exempt them from the tax, some providers began paying it. Some did not. Some, such as Netcom in California, passed the tax along to their customers. . . .

Cellucci’s moratorium last through the end of the year, and is intended to fill the gap while bills exempting Internet service providers from the tax make their way through the Legislature.

Cellucci said legislation should still be enacted to make the exemption permanent and retroactive to 1990, a move that would mean the state would have to return some $6 million to providers who already have paid the sales tax. . . .