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Part of Internet Fee Is Ruled an Illegal Tax

April 09, 1998|Bloomberg News

Part of the fee Network Solutions Inc. collected to register Internet addresses was declared an illegal tax in a court ruling that could yield refunds totaling $50 million. The ruling came in a lawsuit challenging the exclusive arrangement that Network Solutions had with the National Science Foundation to register Internet addresses. From 1995 until April 1, the company collected $30 for the U.S. government's Intellectual Infrastructure Fund as part of the $100 fee it charged to register Internet domain names ending with ".org," ".edu," ".com" and ".net." U.S. District Judge Thomas F. Hogan held that the $30 fee was an illegal tax because it wasn't levied by Congress but devised by Network Solutions and the National Science Foundation. Hogan held off ordering refunds while he decides whether to certify the lawsuit as a class-action case on behalf of all Internet users who registered between 1995 and April 1. Washington lawyer William H. Bode, who represented the plaintiffs, estimated that the fund contains almost $50 million.

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