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To: Terry who wrote (5722)	4/7/1998 11:11:00 AM
From: IceShark	Read Replies (2) \| Respond to of 8002

Terry, Its been awhile since I've read the 10q/k but I seem to have the impression that they may not be collecting for one or two states. But in any event, in the big picture there is no longer any advantage over say a CPU with respect to avoiding sales tax. I believe this issue was a significant contributor to margin pressure since these agreements have only been around for a couple of years, the agreements started in a staggered manner (some states were quicker to get going than others) and by in large the agreements were prospective in nature i.e. in return for entering into the agreements, the states promised not to go after prior sales. So the timing of these agreements coming online seems to correspond with reported margin pressures. I'm somewhat surprised that there has not been a greater impact on the direct model. 6 or 7% is a fair chunk of change. Regards, DWW