Now Municipalities Are Whining About VoIP Tax Bans

from the where's-the-justification? dept

Various state governments have been trying everything possible to tax VoIP systems, though the FCC and courts have managed to block them at every turn so far. However, it’s not just the state governments that are pissed off about people being able to (gasp!) talk without adding a few pennies to the bureaucratic coffers. Municipalities are also freaked out about “lost” revenue due to people ditching traditional (heavily taxed) phone lines in favor of VoIP. Still, what’s unclear is what rationale the city governments have for getting any money from VoIP offerings. With mobile phone service — another favorite target of local politicians — the government can make claims about giving those companies permission and land for cellular towers. However, with VoIP, it’s hard to see the rationale. In fact, plenty of the current taxes stem from a tax set up to fund the Spanish American War, but seems to have little to explain why it was kept on the books for the past century (though, one person in the article notes that the Spanish American War communication tax apparently worked: “It was obviously successful, because they have not attacked us since then.”) Either way, it sounds like this is going to be yet another issue for VoIP providers to deal with going forward.

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