TELECOM Digest OnLine - Sorted: Telecom Taxes: Is A Breakthrough Near?

Telecom Taxes: Is A Breakthrough Near?

Angela Epstein (
Wed, 8 Dec 2004 12:44:11 -0500

Bad news for the industry - the consumers and a terrible message to the
innovators -

Jack Decker notes:

Note who is apparently being left out of these talks -- phone
customers! Wonder if there is any hope they might finally repeal the
Spanish-American War tax (now known as the Federal Excise Tax) on
phone bills? I suppose it would be too much to hope that they would
get rid of the "corporate welfare" charges on the bills (USF and
similar charges that really don't need to be there).

DECEMBER 13, 2004 * Editions: Edition Preference

Washington Outlook
Edited by Mike McNamee

Telecom Taxes: Is A Breakthrough Near?

In the battle over whether states can tax new technologies, the
nation's governors won a skirmish in November. While Congress agreed
to temporarily restore a ban on state taxes on monthly Internet access
charges, anti-tax lawmakers failed to bar state levies on Internet
phone calls -- known as Voice-over Internet Protocol (VoIP). The issue
is critical because VoIP promises to dominate the phone business
within the next decade.

Now the states are going on the offensive. BusinessWeek has learned
that two new initiatives may set the stage for dramatic changes in the
way all telecom services are taxed. For consumers, that may mean an
end to the stew of mind-numbing charges levied by state and local
governments. But it may also mean that VoIP, now tax-free in most
locales, will be hit by the same taxes as traditional phone
services. At stake: $20 billion a year in taxes.

To protect that revenue, the National Governors Assn. has asked
officials representing states, cities, and counties to meet with top
telecom officials in Washington on Dec. 15 to begin talks aimed at
resolving the tax issue. The goal: Simplify levies while taxing all
phone services equally -- no matter what technology delivers
them. "It's important that we work through this in a cooperative
fashion," says Virginia's Democratic governor, Mark Warner, president
of the NGA.

Full story at:

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