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> Internet taxes possibly on the way, would force large price increases
Posted: Nov 12 2003, 11:24 AM
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Group: Advantagecom Staff
Posts: 4,340
Member No.: 9
Joined: 12-July 02

If you like inexpensive hosting and Internet access service, you really need to take action to protect it. Federal, state, and local governments in the US are itching to get their grubby little fingers on your money by taxing everything from web hosting to Internet access and everything in between. It would force us to act as tax collectors for every state and local goverment in areas where our customers live and do business.

Even if you don't live in the United States, this issue affects you. The additional taxes will require us to hire additional staff just to process all the tax paperwork and take care of the additional accounting requirements. Additional taxes will be levied on the services we buy during the course of providing service to you, which will also force prices higher.

Here's an email I received today from a respected source. Certain email addresses and phone numbers have been removed since that information isn't general public knowledge.

> From: "Corrina Wolfe" <------@aaserviceproviders.org>
> Date: Wed Nov 12, 2003  7:48:28 AM US/Pacific
> To: <aaspmembers@aaserviceproviders.org>
> Subject: S.150 (The Internet Tax Nondiscrimination Act)
> Members,
> We received this alert this afternoon
> and are passing it along to you. Action is
> required because of the ramifications it could have
> on your business.
> ============================================================
> USIIA Alert          November 10, 2003          Alert 03:12
> ============================================================
> This is an urgent alert to all US-based Internet Service
> Providers -- and particularly those in the states of Ohio,
> Tennessee, South Carolina, North Dakota, Delaware, Alaska,
> Florida, California and New Jersey -- from the US Internet
> Industry Association.
> Please give this the widest possible circulation to Internet
> Service Providers and subscribers.
> ============================================================
> On October 31, 2003, the moratorium on new, multiple and
> discriminatory taxes on Internet access expired.  A bill to
> make the moratorium permanent, S.150 (The Internet Tax
> Nondiscrimination Act) is currently being blocked in the US
> Senate, and unlikely to be voted on until late in November,
> if ever.
> If the legislation making the moratorium permanent is not
> voted on, billions of dollars in new taxes could be levied
> on Internet users, with almost no limitations.  ISPs will
> need to collect and remit taxes to any number of different
> taxing authorities in every city, county and state in which
> they do business.  Other Internet services -- Voice over IP,
> Instant Messaging, Electronic Mail, Downloads, Web Hosting,
> and more -- will also be subject to new taxes.  The cost of
> compliance will put most Internet providers out of business,
> and will negatively impact both churn rate and the ability
> to acquire new customers.
> The taxes will cripple efforts to deploy broadband in every
> state, affecting business customers even more than residential
> customers.  It will also cripple the deployment of broadband
> services into rural areas.  No form of Internet access or
> service will be safe from new, multiple and discriminatory
> taxes.  Cable, Telephone, Satellite, Wireless and all other
> forms of Internet service would be affected.
> This is not a hoax -- states have attempted to impose taxes
> for the five years the moratorium has been in place, and
> examples of abuses by tax commissars at the local level are
> numerous.  Also note that the process will be automatic --
> many states already have procedures in their tax code to
> implement new and retroactive taxes the moment that the
> moratorium is lifted.
> Opponents blocking the moratorium -- the Senators who support
> the creation of billions of dollars in new, hidden taxes
> on the Internet -- are:
> Lamar Alexander (R-TN)
> Phone: (202) 224-4944
> Fax: (202) 228-3398
> Thomas Carper (D-DE)
> Washington, D.C. 20510-3504
> Phone: (202) 224-3353
> Fax: (202) 228-1382
> George Voinovich (R-OH)
> Washington Office:
> Phone: (202) 224-3353
> Fax: (202) 228-1382
> Ernest Hollings (D-SC)
> Washington Office:
> Phone: (202) 224-6121
> Fax: (202) 224-4293
> Ted Stevens (R-AK)
> Phone: (202) 224-3004
> Fax: (202) 224-2354
> Bob Graham (D-FL)
> Phone: (202) 224-3041
> Fax: (202) 224-2237
> Byron Dorgan (D-ND)
> Phone: (202) 224-2551
> Fax: (202) 224-1193
> Dianne Feinstein (D-CA)
> Phone: (202) 224-3841
> Fax: (202) 228-3954
> Frank Lautenberg (D-NJ)
> Phone: (202) 224-3224
> Fax: (202) 228-4054
> These champions of higher taxes have offered a "compromise"
> that would apply for only two years, and would affect only a
> dedicated line from the end user to the ISP's facility --
> the access point, head end or station nearest the consumer.
> New taxes would be heaped on the remainder of the network --
> lines to the Network Access Point, the Internet backbone,
> redundant networks and other elements.  Dial-up customers,
> who do not have dedicated access, would get no break at all.
> Siding with these Senators are other elected officials who
> want to increase taxes -- the state governors.  Governors of
> virtually every state (except Colorado, whose Governor Bill
> Owens stands against taxing the Internet) are lobbying
> fiercely to see the moratorium defeated.
> In the end, most Internet access providers in the US will be
> immediately and permanently driven out of business.  The cost
> of Internet will nearly double for most end users, and will
> more than double for dial-up customers, as these taxes are
> passed along.
> 1)  Go to http://NoEmailTax.com to get current information.
> 2)  Make certain that every one of your subscribers is aware
>    of the impending new taxes and let them know how to
>    contact their Senators (see http://www.congress.org for
>    help).
> 3)  Contact your Senator and demand that he or she support
>    the permanent extension of the Allen-Wyden tax moratorium
>    (bill S.150).
> 4)  Make this an issue in your state.  Write to the newspapers.
>    Call talk shows.  Make it a campaign issue.  Get involved,
>    for your own sake and that of your subscribers.
> 5)  If you reside in Ohio, Tennessee, South Carolina, North
>    Dakota, Delaware, Alaska, Florida, California or New
>    Jersey, your Senators need to hear from you today on this
>    issue.
> 6)  Forward this alert to every ISP with whom you do business,
>    and every ISP discussion list you belong to.  Urge them
>    to take action today.
> =============================================================
> This email is an alert from the US Internet Industry
> Association, the nation's oldest and largest trade association
> for Internet commerce, content and connectivity. Information
> regarding USIIA can be found at http://www.usiia.org.
> Please communicate this information to other ISPs and
> Internet companies.
> "Independent ISPs working together DO make a difference!"
> Best Regards,
> Russ Ferguson
> President/CEO
> American Alliance of Service Providers

If you live in the US, do your part and contact your Senator. Tell them that Internet taxes from state and local governments are unacceptable. The Internet is international and interstate in nature and as such, should never be taxed by a local authority. Thousands of local authorities imposing new taxes would result in a legal nightmare due to overlapping duplicate taxation and widely varying tax regulations.

Andrew Kinney
CTO, Advantagecom Networks

Please do not private message me. My regular management duties preclude responding to every customer that sends me a support issue. Instead, post on the forum or contact tech support.
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