Taxes, Taxes, And Internet Taxes

Legal Issues

from the when-the-government-needs-money... dept

There’s a law in the US called the Internet Tax Freedom Act which says that internet access cannot be taxed. The idea is to encourage more people to connect to the internet. Increasingly, though, it appears that government agencies are sneaking around this prohibition. State governments are increasingly figuring out ways to tax DSL service by classifying it as a “telecommunications service” instead of “internet access”. On top of this, the FCC is looking to add a tax to cable modem service, by reclassifying the control they have over “information services”. In other words, despite the laws saying you can’t tax internet access, when governments are desperate for money, they’ll find a way to tax anything – even if it’s specifically prohibited. On a related note, over in Europe, they’re now requiring the collection of sales tax, even if the sale is done by an American company. So, not only are US companies having to worry about how they’re going to deal with all the different US state sales tax rules, they also have to collect taxes for the EU.