AOL Doesn’t Have to Pay Iowa Sales Tax, Court Says

     DES MOINES (CN) – America Online does not have to pay a state sales tax on the gross receipts it receives from Iowa customers, because the company provides an interstate service, the Iowa Court of Appeals ruled.

     The court ruled that because subscribers in Iowa can’t access AOL without connecting through out-of-state servers, the company does not provide an in-state communication service. Thus, AOL is not required to pay the Iowa sales tax.

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