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States Fight Internet Tax Ban, Cite VoIP Concern

PetiePooo writes "From an article at PCWorld: The Multistate Tax Commission is fighting a bill which makes the moratorium on internet taxes permanent. Their complaint is that it could be interpreted to include VoIP telephony such as Packet8 and Vonage, and they would lose that lucrative tax base as people switch from incumbent providers. The House has already approved the bill. When will the politicians figure out that VoIP is a going to end up as a product, not a service? Voice will be just another form of data. Here's another related article."

12 of 204 comments (clear)

  1. VOIP may be data... by mOoZik · · Score: 4, Insightful

    ...but so is a regular telephone line. sure, it's analog "data," as opposed to digital for VOIP. If we follow that argument, then we shouldn't have to pay for telephone usage, either.

    So the only thing that sets them apart is being analog or digital? I think if it is used for communication, they are going to see it as a threat.

    1. Re:VOIP may be data... by swordboy · · Score: 4, Insightful

      So the only thing that sets them apart is being analog or digital?

      No...

      I pay taxes on my broadband connection already. If I run VoIP through that connection, I shouldn't have to pay taxes for telecom infrastructure that I don't use.

      Telecom tax is not insignificant. This is because PSTN is bulky. If I chose to move to the more efficient packet-switched service, then there is no reason that I should have to support PSTN anymore. It will only keep it alive that much longer.

      --

      Life is the leading cause of death in America.
  2. Comment removed by account_deleted · · Score: 5, Insightful

    Comment removed based on user account deletion

  3. All down to mismanagement by hajejan · · Score: 3, Insightful

    VoIP is hardly the problem in this case - I think the main problem is that the states are so incredibly strapped for cash after Bush' gross mismanagement that they are basically are on the path to bankrupcy...

    Hence, they would do anything for some extra cash, rather than realising that "yes, VoIP would be quite cool, and people should pay just as little tax on it as they do on the Internet itself"

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  4. This always happens when... by Anonymous Coward · · Score: 3, Insightful

    new technology developments allow getting for less something that people was forced to pay much more in the past.
    What would happen (warning: tinfoil-hat example here) if somebody discovered a way to produce cheap energy or a way to transmit data at long distances without using radio waves?
    Would the rulers push the use of these technologies by anyone, or rather immediately find a way to tax whatever material/media/principle thay're based on after being lobbied (bought) by the already estabilished industries?

  5. on what basis will they collect the tax? by jlemmerer · · Score: 3, Insightful

    will they tax the online time or data that is transmitted. and will i get a refund for unwanted data (like spam) or what? and what if you get you data from another country? or another countryman gets data from you? how come that you should pay for something that is wanted by another guy in a country that doesn't tax data? do i also have to pay for the data sent by a malicious worm?
    questions over question...

    --
    ".Sig Stealer" was here
  6. Re:The award for the most naive question goes to by LostCluster · · Score: 3, Insightful

    When was the last time you carried a box of VoIP out of a store or had it shipped by UPS... seems more like a service to me...

  7. Re:Taxes at all government levels will be affected by Wylfing · · Score: 4, Insightful
    Losing the telephone tax base is not the end of the world - governments will increase the revenue stream elsewhere.

    This is a Good Thing(tm). The fewer tax streams, the better. It is vastly preferable to be taxed once (say, on income and capital gains, because it needs to be progressive) and be done with it. Taxing citizens 2-5 times on the same money only creates government incentives that are hard to manage. This is a prime example -- government effectively working against the people because of a too-complex tax picture.

    --
    Our intelligent designer has never created an animal that we couldn't improve by strapping a bomb to it.
  8. Re:"Today is a historic day" by Motherfucking+Shit · · Score: 4, Insightful
    How many of your democrats thought you would be agreeing with a republican today?
    Me.

    I'm a registered democrat, but only because I lean slightly left of center as opposed to right of center.

    I'm pro-gun (typically a conservative trait), but I'm also pro-choice (that disqualifies me from being a true conservative, I suppose). I don't favor taxes (I must be an evil republican), but I don't favor the death penalty either (wait, I must be a bleeding heart). I support the idea of gay marriage (now the neocons surely won't accept me!) but I don't care much for welfare (so maybe I'm conservative after all...).

    Goddamnit, it's time that people stop seeing things in black and white!

    I'm a democrat but I agree with republicans every day. And republicans agree with me. Not on everything, mind you, but nobody is required to vote a straight ticket. You should vote for the candidate you feel represents your stance on the issues, regardless of which party they're aligned with. If you're a registered republican that doesn't mean that you can't vote for a democrat when he makes sense, and vice versa.

    The fact that I'm pro-choice doesn't make me a left-wing nutcase. The fact that I don't like the idea of subsidizing people who are too lazy to find a job and too careless to bother with birth control and wind up with 6 kids whose lives are paid for with my tax dollars doesn't mean I hang out with Rush Limbaugh. The fact is, I can take a liberal stance on one issue and a conservative stance on another. And regardless of how I'm registered, I can and will vote for any damned person I please.

    I've voted for republicans and I'll do it again, despite the fact that I'm a registered democrat. There are a fair share of politicians from both parties who "get it." (Arguably there aren't enough from either camp who "get it," especially when it comes to technology, but such is life.) There are also a fair share of politicians from both parties who clearly don't "get it." The ones who don't "get it" - for my own personal value of "getting it" - will not be getting my vote. I don't care what their party affiliation is.

    Just because Chris Cannon is a republican doesn't mean that he and I can't see eye to eye on something. Today, we do see eye to eye on the issue of internet commerce. Tomorrow, on some other issue, who knows.

    In America, voting is not only a right, it's a duty. Just remember to vote for the candidate, not for the party.
    --
    "BSD: Free as in speech. Linux: Free as in beer. Windows 10: Free as in herpes." --Man On Pink Corner in #52607549.
  9. Re:VoIP in place of phone service by RevMike · · Score: 3, Insightful
    It's still phone service. Phone service that's delivered over airwaves, and often is digital these days, is called cellular and that's been taxed since the day it started. Why does VoIP's phone service deserve an exemption?

    If you read the articles more closely, you'll see that internet based VoIP is not really their worry.

    MTC officials say the change could easily be interpreted to mean voice or other telecommunications services offered through packet switching technology. With telecommunications companies expected to move much of their voice services from land-line to voice over IP services, the impact to state and local governments could grow significantly, says Loren Chumley, Tennessee's revenue commissioner.

    States don't object to a narrow ban on Internet access taxes, Chumley adds. "The new, multibillion losses for state and local governments would result from language in the House bill as courts interpret it as providing a blanket exemption for non-federal taxes for the telecommunications industry, granting that industry an unprecedented church-like exemption status," Chumley says.

    As more and more telephone companies switch their internal networks to VoIP, they begin to look more like "internet" companies. The states are (wrongly, IMO) concerned that they'll lose the ability to charge sales/income/proprty taxes on telcos the way they could tax any other business.

    What the moratorium does is block internet s[ecific taxes. Fot instance, you can't be charged more taxes for a phone line that is used for internet access than for a regular voice line. You can't be charged a higher sales tax rate because you purchased an item over the internet rather than on the phone. Internet oriented businesses can't be discriminated against.

  10. What other charges will there be? by LorneReams · · Score: 3, Insightful

    On my phone bill, I pay almost 30% to fees and taxes. On VOIP, will they try to add FCC and associated infrastructure charges when the infrastructure is now irrelevant? I can understand paying a 911 tax (somewhat) but paying a charge that is supposed to cover the cost of the wires seems a bit ridiculous. I can't see them letting go of this money, both in taxes and in fees.

  11. Re:The award for the most naive question goes to by SpinyNorman · · Score: 3, Insightful

    When was the last time you carried a box of VoIP out of a store or had it shipped by UPS... seems more like a service to me...

    Nope.

    Your ISP provides a service (internet connectivity).

    VoIP is nothing more than the VoIP phone that you carry out of the store that enables you to use it for voice.

    What you are saying is equivalent to proposing to tax people who buy fax machines or answering machines to get added value out of their (current) phone service, because "fax is a service" and "automated call answering" is a service.