Free Order Lifting Stay - District Court of Federal Claims - federal

Case 1:05-cv-00501-RHH

Document 19

Filed 02/06/2007

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In the United States Court of Federal Claims
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SOUTHERN NEW JERSEY INTERNET * PROVIDER, * Plaintiff, * v. * THE UNITED STATES OF AMERICA, * Defendant. * * * * * * * *

No. 05-501T Filed: February 6, 2007

ORDER Plaintiff is an internet service provider seeking a refund of $9,877.16 of communications excise taxes paid to the United States pursuant to 26 U.S.C. § 4251. Plaintiff alleges it paid this amount in error because the dial-up services it purchased to provide its customers access to the internet were outside the scope of the statute. The Internal Revenue Service disallowed plaintiff's request for a refund on June 3, 2003. On April 27, 2005, plaintiff filed its Complaint in this court. At the parties' request, the court granted a motion to stay this matter pending rulings in similar cases. The outcome of these cases, however, seems largely dependent upon unique factual circumstances. For example, this court recently held that a plaintiff was entitled to a refund, but only for some of the communications excise taxes paid. Whether plaintiff was taxed in error depended upon the type of dial-up access services plaintiff employed: The only services taxable under 26 U.S.C. § 4251 were those involving communication lines for telephonic quality two-way service. USA Choice Internet Serv., LLC v. United States, 73 Fed. Cl. 780 (2006). This court denied cross-motions for summary judgment based on the reasoning of USA Choice in XO Communications, Inc. v. United States, Nos. 03-2754T and 06-40T, Order (Jan. 10, 2007) (Wheeler, J. ). The court stated that a trial would be necessary to determine the types of dial-up access utilized by the plaintiff.

Case 1:05-cv-00501-RHH

Document 19

Filed 02/06/2007

Page 2 of 2

Counsel should explore resolution of this matter with guidance from these rulings. We are available to discuss possible means of disposition short of further litigation. In lieu of settlement, we will schedule this case for trial. However, we see no reason to continue the stay at this time. The parties will file a joint status report by February 20 to request a pretrial schedule.

/s Robert H. Hodges, Jr. Robert H. Hodges, Jr. Judge

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