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Denver Suburb Wants to Tax Internet

DENVER (CN) - A Denver suburb wants to tax Verizon for providing Internet service, despite the Internet Tax Freedom Act of 1998.

The City of Thornton sued its Internet provider Verizon Wireless, and the executive director and a hearing officer of the Colorado Department of Revenue, on Nov. 6 in Denver County Court.

Congress passed the Internet Tax Freedom Act in October 1998, putting "a temporary moratorium on the imposition of tax on certain charges for Internet access," the city says in the lawsuit.

But Thornton, pop. 124,000, claims that the law contains a grandfather clause, exempting Internet tax "that was generally imposed and actually enforced prior to Oct. 1, 1998," under certain conditions.

Thornton claims its tax is grandfathered.

It seeks declaratory judgment that Verizon owes it taxes. The 11-page lawsuit does not estimate the amount of the taxes.

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