Telecom industry ties Internet tax ban to net neutrality

The broadband Internet industry says a long-term ban on state taxation of Internet access is needed more than ever because of the Federal Communications Commission’s network neutrality rules. Three major telecommunication trade groups sent a letter to all US senators warning that the monthly bills customers pay for Internet access are under “imminent threat” of more taxes and fees because of the FCC’s decision to reclassify the service as a common carrier. “Expiration would likely increase the cost of broadband access as it would become vulnerable to new onerous telecommunication taxes and fees, an imminent threat due to the Federal Communications Commission’s recent reclassification of broadband services as a Title II telecommunications service,” the letter reads.

The letter was sent by the National Cable and Telecommunications Association, CTIA -- The Wireless Association and USTelecom. The lobbying groups urged senators to pass a customs enforcement compromise, which includes a permanent extension of 1998 Internet Tax Freedom Act (ITFA). The House approved the soon-to-expire tax ban during the week of Dec 7. “We urge a yes vote on the conference report and ask you to oppose any proposal to strip the current language making ITFA permanent,” according to the letter. A permanent ban is broadly supported, but critics have wanted to use it as a vehicle for a more controversial bill that would give states more authority to tax online purchases made by their residents.