Tax Law on the Internet


copyright 1996

Editor: Donald M. Cameron , Aird & Berlis

Contributors: Donald M. Cameron , Tom S. Onyshko & W. David Castell


Contents

Electronic Commerce Tax Issues

Charities


Electronic Commerce Tax Issues

In November, 1996, the U.S. Treasury released a discussion paper entitled Selected Tax Policy Implications of Global Electronic Commerce on U.S. federal income tax issues for electronic commerce.


Charities

Vancouver Regional Freenet Association v. Minister of National Revenue considered with whether providing free access to the Internet is a chartiable activity. The Minister rejected the plaintiff's application to become a registered charity on the basis that the organization does not have sufficient control over the information transmitted and received by the users of the system. The court held the organization was a charity stating that the free exchange of information amongst members of society has long been recognized as a public good and is essential to the maintenance of democracy. In dismissing the Minister's control-based argument, the court stated that a distinction must be made between the medium and the message. Where an organization which itself is providing a message to the public seeks charitable status (e.g. a newspaper, television station, etc.) there must be concern that it controls the messages so as to ensure that they are consistent with a charitable purpose. In the present case, the appellant provides access to messages, not the messages themselves. The fact that the system could be used for non-charitable, even criminal, activities does not diminish its chartible character.


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