Court Says VoIP Is Not A Telco Service; States Can't Tax It As One

from the just-say-no-to-usf dept

In recent years, various state regulators, desperate to dredge up extra tax income, have targeted VoIP providers, using the infamous "like a duck" test, to say that since they look like a traditional telephone service, they need to pay taxes like one -- despite the fact that they don't make use of the same infrastructure (which is part of the reason why telco services were taxed in the first place). A couple years ago, an appeals court rejected this theory in Minnesota, and now an appeals court has come to the same conclusion in Nebraska, stating that VoIP services, such as Vonage, are not telecom service providers, and thus are not responsible for taxes such as the Universal Service Fund. Of course, this also contradicts some other rulings... so perhaps we'll eventually see this in the Supreme Court as well.
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Filed Under: telco service, voip
Companies: vonage

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  1. identicon
    bob, 5 May 2009 @ 2:47am

    A Mess I Tell You

    Telecommunications in the USA are a mess, look how long it took to get rid of the Spanish American war tax!
    Look at the Universal Service Fund where does that money go? How much is it? How is it administered?

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