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Thursday, October 04, 2007
Internet Access Tax: Inquiring Minds Want to Know
Please help me out here. See, there's a $100 billion dollar industry in the United States that has enjoyed a federally-mandated moratorium on sales taxes for over a decade, arguing that unless the moratorium is made permanent, small retailers will have a hard time competing against the big, bad guys. As Brian Bieron, the senior director of government relations at eBay, said, fewer small businesses and customers would use the Internet if the ban expires: "That means fewer sales and less opportunity to compete with the mega-retailers."
EBay's eagerness to be the fall guy for the small guy is touching. Similar expressions of sympathy abounded at yesterday's House Committee on Small Business hearing on "The Internet Tax Moratorium: The Potential Negative Impacts on Small Businesses of Allowing Moratorium to Expire."
Little guy CEO and hearing witness Brett Dewey owns "a small online company called WickedCoolStuff.com that sells toys, t-shirts and other small gifts that we think are wicked cool... A new tax now would be the equivalent of changing the rules in the middle of a game we're currently losing." See why I'm so confused?
So, OK, a few questions:
- how is the internet access provider industry so different from all others that states and localities should be barred from collecting sales taxes on services that it provides?
- why should Washington be involved in restricting state and local sales tax policy?
- how would including this industry among all others subject to sales tax constitute discriminatory and predatory taxes on America's small businesses?
- If their concern is truly about limited internet access in rural or disadvantaged communities, why is industry opposing state efforts to close the digital divide? The Center on Budget provides an answer:
Expressions of concern by telecommunications industry representatives about the availability of broadband to currently under-served segments of the population — such as low-income and rural households — should be viewed skeptically in light of other policy positions and actions of the industry. The major telephone companies have, for example, vociferously fought the direct deployment of broadband networks by municipal governments. They have also opposed requirements that the companies build-out broadband networks to low-income and high-income neighborhoods alike in jurisdictions in which it they have been granted a franchise to provide service. Verizon is currently seeking to shed all of its telephone and broadband lines in the predominantly rural states of Vermont, New Hampshire, and Maine so that it can concentrate on deploying its expensive new fiber-optic "FiOS" network in affluent suburban neighborhoods in other states.
Let's lift the moratorium on rational and cogent answers from industry. And maybe hold a hearing at which the public can get access to state and local officials' perspectives on the issue.
Posted by Dana Chasin
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