TMCnet Feature
September 13, 2013

CenturyLink to Congress: Don't Tax the Internet

By Steve Anderson, Contributing TMCnet Writer

Thanks to Senators John Thune of South Dakota and Ron Wyden of Oregon, as well as Representatives Bob Goodlotte and Anna Eshoo, there are bills in place to extend, permanently, what's known as the Internet Tax Freedom Act, a law which calls for a moratorium on all taxes paid on subscription fees for Internet access in places where those fees don't already exist. But with the Internet Tax Freedom Act set to expire, a groundswell of support for the Act is coming from not just representatives, but also from businesses involved in Internet provision and use.

One of these businesses is CenturyLink, who recently joined up with the Internet Tax Freedom Coalition in a bid to support efforts to extend the Internet Tax Freedom Act, which is due to expire November 1, 2014. Considering that the Act has already been extended three times, since first being signed into law in 1998, it's a safe bet that there's already quite a bit of support behind such a law.

The Internet Tax Freedom Act doesn't apply to purchases made on the Internet, but rather on the actual access. It also blocks a variety of other taxes, as well as blocks the idea of taxing Internet sales at a higher rate, a concept seen by some as protectionist in favor of local merchants. Should the efforts to make the Internet Tax Freedom Act permanent fail, however, there are a variety of potential effects that could result, including the obvious move of adding taxes to the connection in much the same way that telephone bills and cable bills have such taxes added.

There's still quite a way to go between now and the expiration of the most current extension to the Act, but that's just leaving a lot more time to work towards making it permanent. Some might think here that a tax might be a good idea, much like with the phone bill, allowing a way to get more service to more places. Indeed, there are many parts of the United States which have virtually no reliable access outside of satellite connection, a method that's not without its problems. Others, meanwhile—like CenturyLink--assert that the Internet is too valuable an “engine of economic growth” and development to be impeded so with taxes and other similar issues, and that's not an invalid point either. CenturyLink offered up a statement recently saying that “High costs are one of the biggest barriers right now to widespread consumer adoption of broadband—something we've been working hard to increase, not decrease.”

With governments, businesses and regular people all seemingly strapped for cash these days, it's not surprising to see governments take an interest in putting taxes on Internet access, where formerly there wasn't so much interest. Yet by like token, regular people aren't exactly enthusiastic about paying more for Internet access either, especially given that regular people are just as cash-crunched. The losses to the tax picture in terms of purchases and employee wages of the companies that provide the goods in question are likely to outweigh any gains made in applying taxes to access.

It's certainly going to be a topic worth watching as 2014 approaches, and for many, the hope that the Internet Tax Freedom Act becomes a permanent fixture—or at the very least extended again—is a strong hope indeed.

Edited by Blaise McNamee
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