Language Selection

English French German Italian Portuguese Spanish

Legislation to prevent federal Internet tax

Filed under
Web

A U.S. senator said today that he will soon introduce a bill that would prevent Congress from extending a long-standing telecommunications tax to Internet access.

Sen. George Allen (R-Va.) said legislation is needed after Congress' Joint Committee on Taxation in January suggested an expansion of a 3% federal excise tax (FET) on telecommunications to Internet traffic, including e-mail and data services. Allen plans to introduce his bill, which would exempt Internet access from the FET, early this week.

The FET, first enacted in 1898 to fund the Spanish-American War, raises about $6 billion a year for the U.S. government. At points during the past 107 years, the tax has been eliminated, reinstated and raised to 25%. Congress made the tax, which applies to local and long-distance calls, permanent in 1990.

"We won the Spanish-American War over 100 years ago," Allen said at a news conference. "This tax represents an unnecessary service tax on consumers."

The Joint Committee on Taxation in January presented three options for the FET, one being the proposal to tax all Internet traffic. A second option would extend the FET just to voice traffic over the Internet, with a third option redefining how long-distance calls are taxed, with no taxes on Internet data or voice.

In November, Congress passed the Internet Tax Nondiscrimination Act, which extended a moratorium on new Internet-only taxes passed by state and local governments. But that bill, also sponsored by Allen, didn't apply to the existing FET, Allen said. His new bill wouldn't prohibit taxes on voice-over-IP (VoIP) calls. That issue would be addressed under a separate bill likely to be introduced later.

The January report from the Joint Committee on Taxation noted that the growth of wireless voice services and the Internet have created confusion about how the FET should be applied. "The present communications excise tax provisions were enacted before the development of most modern technology -- the growth of computers and new electronic means of communication," the report said. "The proliferation of wireless communications technology and the Internet, and in particular broadband access, has blurred the lines between 'data' and 'voice' and between the functions of transmission and application. Consequently, service providers have found it increasingly difficult to determine which services are taxable communications services and which are nontaxable information services." continued>>

More in Tux Machines

Jessie Release Date: 2015-04-25

We now have a target release date of Saturday the 25th of April. We have checked with core teams, and this seems to be acceptable for everyone. This means we are able to begin the final preparations for a release of Debian 8 - "Jessie". The intention is only to lift the date if something really critical pops up that is not possible to handle as an errata, or if we end up technically unable to release that weekend. Please keep in mind that we intend to have a quiet period from Saturday the 18th of April. Bug fixes must be *in Jessie* before then. Read more

Radeon Linux Benchmarks: Catalyst 15.3 Beta vs. Linux 4.0 + Mesa 10.6-devel

Before ending out March, here's some new OpenGL Linux benchmarks comparing the closed-source Catalyst 15.3 Beta driver against the Linux 4.0 development kernel with Mesa 10.6 Git for the freshest open-source graphics driver code. Read more

5 questions to determine if open source is a good fit for a software project

A benefit of open source in general, and commercial open source in particular, is that you have the support of others as well as the ability to do the maintenance yourself. I hope these questions will help you determine whether open source is a good fit for your next software project. Let me know if there are other questions you would add to this list. Read more