The Seattle Times famously called the plans of the local authorities based in Tacoma, Washington, to tax ISPs as phone companies on top of the telecommunication taxes that they were already paying, a "dumb" idea. This would not only result in double taxation but it would also discourage businesses that rely on e-commerce as their principal source of income to stay away from this city. Plus small ISPs that are always trying to save money to offer competitive charges to the consumer will just evaporate.
The scheme behind the bright idea was to raise $250,000 annually for the city. The plan was to classify Internet Service Providers as telephone utility companies. This would in turn make them liable for higher taxes. On top of that all businesses doing any business with a Tacoma resident had to register and pay $72 annually for the privilege of doing business in their city. This was a very dangerous precedent that was being set by a local government and if it had not been stopped, it would have had very negative repercussions on the e-commerce in the country. After the "dumb" idea was implemented in Tacoma, Washington, in September 1996, the state government, eight months later in May 1997, made a law to prevent something like this from taking place again, repealed it.
