Could Internet taxes show up?

Submitted by acohill on Wed, 09/26/2007 - 08:39

A 1998 ban on taxing services provided over the Internet is due to expire next month. Congress has three options: make the tax ban permanent, extend the ban for several more years, or start raking in a whole new source of cash.

If Congress decides to tax Internet access, everyone's access provider bills (dial up, DSL, cable modem, wireless, Blacksberry, etc.) could jump as much as fifteen to twenty percent.

The big picture issue here is whether Congress ought to be making the telecom industry tax collectors at all. For business, telecom taxes are pure overhead that crimp a company's ability to create jobs and pay for expansion. And if the company is profitable, it is still going to pay taxes on the profits. From an economic development perspective, telecom taxes are a drag on jobs development and business growth. Design Nine, as an example, gets phone bills with as much as 30% of the charges just taxes of various kinds, from local, state, and the Federal government.

Given the weak state of the economy right now, let's hope Congress does the right thing and extends the ban on Internet taxes for services.