Claims of Title II Tax Increases Are 'Baloney,' Wyden Says
Claims that reclassifying broadband would mean new state and local taxes are “baloney,” Sen. Ron Wyden, D-Ore.,wrote in a blog post Thursday. The Internet Tax Freedom Act “broadly defined the term ‘Internet access,’” making it “illegal to tax the internet,”…
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Wyden wrote. “Under Title II or otherwise, the FCC could define the Internet as a series of tubes and ITFA would still prohibit taxes.” The grandfathering clause in ITFA “will not allow cities to suddenly open the Internet up to telecom taxes,” Wyden wrote. A Progressive Policy Institute study said reclassification would lead to $15 billion more nationally in state and local taxes (see 1412150053). PPI Senior Fellow Hal Singer, who co-wrote the study with Brookings Institution Senior Fellow Robert Litan, said Friday that IFTA does shield broadband from general sales taxes, and he has reduced the annual estimated increase to $11 billion. “Perhaps Wyden is missing the larger point: Since state-based telecom-based FEES are already on the books, reclassifying broadband as telecom makes it EASIER for states to apply those same fees to broadband,” Singer emailed. “Rather than having to pass new legislation, an unelected bureaucrat in some local or state tax office can simply grab a new source of revenues for taxation, citing the FCC’s new definition of broadband.” The study didn't include the grandfathering issue, Singer said. NCTA, which has run ads warning of tax and fee increases under a Title II net neutrality approach, supports ITFA and its permanent extension, an association spokesman said. "ITFA does provide protection from many state and local taxes. However it does not close the door on the full range of taxes and fees -- including Universal Service Fund fees – that could be imposed if broadband were reclassified as a telecommunications service," the spokesman said.