Mayor of Ventura, CA Sends Letter
to Senators Boxer and Feinstein
to express concerns about HR 49/S 150
October 1, 2003
The Honorable Barbara Boxer
United States Senate
Washington DC 20510
The Honorable Dianne Feinstein
United States Senate
Washington DC 20510
Dear Senators Boxer and Feinstein:
On behalf of our colleagues in local government, the City of San
Buenaventura (Ventura) is writing to express our concerns with S.
150, the "Internet Tax Non-Discrimination Act." While
we understand, and can support, many of the goals of the amendment’s
authors, we fear that the language of S. 150 will promote litigation
and confusion. For, despite statements to the contrary, some in
the industry will seek to use the language of S. 150 to avoid traditional
telecommunications sales taxes, and/or franchise or right-of-way
fees paid as rent to use the public rights-of-way for infrastructure
deployment.
The Supreme Court has sustained the right of state and local governments
to require sales taxes on intra- and interstate telecommunications
services provided within our states and communities. See Goldberg
v. Sweet, 488 US 252, 109 S.Ct. 582 (1989). Such telecommunications
sales taxes are comparable to other general excise taxes paid by
non-telecommunications businesses for the privilege of doing business
within our communities.
Separately, since 1893, the Supreme Court has held that right-of-way
fees are not taxes but payments in the form of rent. See City
of St. Louis v. Western Union Tel. Co., 148 US 92, 99, 13 S.Ct.
485, 488 (1893). More recently, the 5th Circuit in City of Dallas
v. FCC, 165 F.3d 341 (5th Cir. 1999) reiterated the holding
of St. Louis when it found that a franchise fee is not
a tax, but an expense of doing business that is essentially a form
of rent.
We would like to work with you to clarify that in adopting S. 150
and its House counterpart (H.R. 49), the Congress does not intend
to impair the collection of traditional telecommunications sales
taxes, nor rights-of-way fees, nor gross percentage fees collected
in lieu of right-of-way fees. Congress should also clarify that
it does not intend to adversely impact the collection of excise
taxes of general applicability on services that just happen to employ
telecommunications, cellular or cable television facilities that
also offer access to the Internet. We offer the following suggested
language to accomplish these goals:
SEC. 5 No Impact on Rights of Way Fees or Franchise
Fees
Nothing in the Internet Tax Freedom Act shall prevent the imposition
or collection of any fees or charges for use of a state or local
government’s right-of-way, taxes in lieu of right-of-way
fees, or sales and use taxes on telecommunications services. Nothing
shall affect or void the terms of any existing franchise as authorized
by Sections 253, 621 or 622 of the Communications Act of 1934,
as amended.
Thank you for your consideration of our suggestions. Please feel
free to contact me at (805) 654-7827 if I can provide additional
information that may assist you.
Sincerely,
Ray Di Guilio
Mayor
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