They may tax our income, but they’ll never tax … our internet!
Right now, most of you don’t pay any state taxes for the right to access the internet. Actually, none of you directly pay state taxes, but some of you have higher internet access fees because your service providers are paying state taxes. This all ties into a federal ban put into place in 1998 which prevents states from taxing internet access. However, some states were allowed to continue to collect taxes if they had a tax scheme in place before the 1998 ban was setup.
But that federal ban is now set to expire on November 1, which would free those other states up to tax away to their hearts’ content. But Senate Democrats are working to extend this ban, while a similar House measure tries to work its way out of the House Judiciary Committee. Senate Republicans also appear to want this legislation, but claim that the Dems are dragging their feet. Senator John McCain has co-sponsored his own bill to make this ban permanent, and he says:
In a little over a month, Americans will be forced to pay more to access the Internet, receive e-mails on their BlackBerries and use the Internet on their cell phones if the Democratic leadership refuses to allow the Senate to debate and pass this legislation.
The issue in the Senate appears to be one of a continued temporary ban versus a permanent ban - while McCain’s co-authored legislation would make the ban permanent, a conflicting bipartisan bill would simply extend the ban for four more years, requiring Congress to revisit the issue in 2012.
So you might want to keep your eyes on this issue for the next month, because if Congress doesn’t get its shit together, you may see your internet bills going up in the near future. Wonderful.