Wednesday, November 5, 2003
TeleCommUnity Alliance Applauds Growing Opposition
to Provisions of Internet Tax Moratorium
WASHINGTON, D.C. A growing number of lawmakers and interested
observers are taking a closer look at S.150, the "Internet
Tax Non-Discrimination Act," and finding serious problems with
what they see, a coalition of local governments said today.
"What they are discovering is that provisions within the bill
would give the telecommunications industry a means by which to avoid
taxes they traditionally have paid," said Montgomery County,
Maryland, Council Member Marilyn Praisner. "That's bad policymaking,
and it's unfair to states and local governments that are relying
on this tax revenue at a time of increasingly worrisome budgetary
Council Member Praisner, who chairs the TeleCommUnity Alliance,
said the local government coalition does not object to a simple
extension of the Internet tax moratorium but is strongly opposed
to expanding the types of services and companies that are exempt
"Contrary to claims we hear repeatedly -- and as recently as
today -- local governments do not want to tax e-mail or tax 'surfing'
the Internet," she said. "We simply want to preserve our
existing rights to collect fair rent for the public's rights-of-way
and to use broad based and nondiscriminatory taxes to support local
government's first responders, make local infrastructure investments
and operate our schools."
TeleCommUnity noted that growing opposition to expansion of the
Internet tax moratorium transcends party lines.
It praised Sen. Lamar Alexander (R-TN), for example, for warning
his colleagues that unless they "want to transfer responsibilities
for local schools, colleges, prisons, sate parks and roads to Washington
DC," they should not dictate to state and local governments
how they can pay for legitimate services.
The Alliance also lauded Virginia Gov. Mark Warner, himself a former
businessman in the telecommunications industry, for outlining his
objections to the bill. The governor has said that, as more services
are bundled together like wireless and Internet access, he is concerned
that any permanent ban on Internet taxation not further remove current
revenue sources from already stretched state and local governments.
The National Governors Association, meanwhile, said in a letter
to Senate leaders that the legislation "would unnecessarily
expand the scope of the existing moratorium by adding certain state
and local telecommunications taxes to the definition of tax-free
And a recent Washington Post editorial that said: "What's
driving this legislation is that telecommunications companies and
Internet service providers see an opportunity not only to make the
tax moratorium permanent -- in itself a bad idea -- but to save
what could amount to billions in additional taxes. ... The last
thing Congress should do now to cash-strapped states is pass a law
that would not only permanently put Internet access off limits for
taxation but also deprive them of revenue that they now collect."
The TeleCommUnity Alliance has asked lawmakers to extend the Internet
tax moratorium for 18 months, during which time TeleCommUnity pledges
to work with the bill's authors to determine what, if any, additional
changes to the moratorium are warranted.
# # #
Read more about S 150 and the local government response