Telecom Tax Restrictions seen Hurting Local Governments

TELECOM TAX RESTRICTIONS SEEN HURTING LOCAL GOVERNMENTS
[SOURCE: Reuters]
U.S. state and local governments could lose $8 billion a year in revenue if Congress further restricts their ability to tax telecommunications services, the National League of Cities said on Wednesday. Alex Ponder, a lobbyist with the National League of Cities, said the organization opposes two tax restrictions included in the Senate telecommunications reform bill. The bill proposes a three-year moratorium on new state and local cell-phone taxes. It also bans state and local governments from charging Internet access taxes and eliminates the existing exemption for municipalities that currently collect this tax. The National League of Cities in a statement expressed concern that these provisions "could represent the first step toward eliminating all telecom-specific state and local taxes" and lead to lost revenues. Together with other local government organizations, the group conducted a study that showed that 81 percent of all cities with populations over 50,000 would see their tax revenues decline if they cannot tax telecoms. This drop in revenue would lead to a reduction in services to local residents with potentially more than 150,000 public sector jobs on the line as well as higher taxes on other taxpayers, the organization said. The study argues that the telecom industry pays essentially the same level of property taxes as, and in some cases lower corporate taxes than, other businesses.
http://today.reuters.com/news/newsArticle.aspx?type=technologyNews&story...

* The Truth About Telecom Taxes and Reform: The Real Effect on Local Government
http://www.nlc.org/Newsroom/Press_Room/11721.cfm

** For more on the Senate bill see
http://www.benton.org/index.php?q=node/2173