Virginia Association of Telecommunications
Officers and Advisors
Sends Letter to Senator George Allen
to express concerns about HR 49/S 150
October 14, 2003
The Honorable George F. Allen
United States Senator
Washington, D.C. 20510-4602
Dear Senator Allen:
As you know, the Internet Tax Freedom Act ("Act") originally
was intended to prevent the taxation of Internet access for a fixed
period of time, and that period now is scheduled to expire on November
1, 2003. Recently, H.R. 49 and your bill, S. 150, were introduced
to make that restriction permanent. VATOA supports the extension
of the present moratorium.
However, the House of Representatives recently passed H.R. 49 with
amendments that expand the ban on Internet access taxes to include
telecommunications services to the extent "such services are
used to provide Internet access." S. 150 now has similar language.
We believe that the language of amended H.R. 49 and S. 150 may threaten
state and local taxing and rights-of-way authority. That potential
threat was acknowledged in the Report of the Committee on Commerce,
Science, and Transportation on S. 150, page 8 (September 29, 2003),
which stated, "Depending on how the language altering the definition
of what telecommunications services are taxable is interpreted,
that language also could result in substantial revenue losses for
states and local governments."
For that reason, VATOA asks you to amend the proposed legislation
to provide explicitly that the removal of Section 1101(d) of the
Act and the modification to the definition of Internet access set
forth in Section 2 of S. 150, as amended, do not affect the traditional
authority of state and local government to assess and collect taxes
and fees that are not enumerated in Section 1101(a) of the Act.
Examples of taxes at risk include traditional sales and use taxes,
excise taxes, property taxes, corporate income taxes, gross receipts
taxes, business and occupational taxes, and other similar taxes
of general application.
Further, the legislation should provide that the modified definition
of Internet access is not meant to affect state and local taxation
of traditional telecommunications services and other services that
are not used to provide Internet access. Federal preemption of these
state and local taxes and fees, whether intended or not, may result
in immediate financial loss to all of Virginia's local governments,
and the size of any such loss could markedly increase in the future
as more communications shift to broadband, Internet-based technologies.
Finally, any new broadly worded federal preemption on state and
local taxes and fees on providers of telecommunications and cable
television services could thwart ongoing efforts in Virginia to
simplify the current tax structure.
Thank you for considering our views on this important matter. If
we can provide you with further information, please feel free to
contact my office.
Sincerely,
Ron Mallard
President
cc: The Honorable John Warner, United States Senator
The Honorable Richard Boucher, House of Representatives
The Honorable Thomas Davis, III, House of Representatives
The Honorable J. Randolph Forbes, House of Representatives
The Honorable Virgil Goode, House of Representatives
The Honorable Robert Goodlatte, House of Representatives
The Honorable Frank Wolf, House of Representatives
Joyce K. Lewis, President, Virginia Municipal League
Oliver H. Bennett, President, Virginia Municipal League
R. Michael Amyx, Executive Director, Virginia Municipal League
James D. Campbell, Executive Director, Virginia Municipal League
return
to the internet taxation page
|
