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| | Huckabee: Ban on Internet access tax could cost state $40 million
Friday, Nov 21, 2003 By Alison Vekshin Stephens Washington Bureau WASHINGTON -- Gov. Mike Huckabee on Thursday said a congressional proposal to ban taxes on Internet access could cost Arkansas as much as $40 million a year in lost revenue. Appearing at a Capitol Hill news conference, Huckabee spoke out against a bill that makes permanent an Internet tax moratorium that has been in place for five years. Further, the bill extends the tax prohibition to all forms of Internet access, including digital subscriber lines (DSL), cable, wireless, satellite and dial-up connections. Authored by Sen. George Allen, R-Va., the proposal has come under fire from state and local officials who argue the bill's definition of "Internet access" is so broad it could exempt a wide array of telecommunications from taxation, costing them billions in tax revenue. "We're not trying to go after new revenue and make an additional tax," Huckabee said. "We simply want to maintain the existing taxing authority that we have." The bill's supporters say the tax break makes the Internet affordable to nearly everyone. "I stand on the side of freedom of the Internet, trusting free people and free entrepreneurs -- not on the side of making this advancement in technology easier to tax for the tax collectors," Allen said earlier this month. While Arkansas does not tax Internet access directly, it does tax traditional telecommunications offerings, such as telephone and cable television, whose definition could be tied to the Internet in the future, said John Theis, assistant revenue commissioner at the Arkansas Department of Finance and Administration. "The definition of Internet access in the bill is broad enough to potentially prohibit the taxation of activities Arkansas currently taxes such as telecommunications if those telecommunications services are provided via the Internet or are bundled with Internet access," Theis said. Congress' five-year moratorium on Internet taxes expired on Nov. 1. The current bill to make the ban permanent sailed through the House in September, but has stalled in the Senate as lawmakers grapple with the definition of Internet access. Huckabee said he supported a compromise crafted by Sens. Lamar Alexander, R-Tenn., and Tom Carper, D-Del., that would extend the moratorium for two additional years, allowing lawmakers time to refine the definition to minimize future state and local tax losses. "It's the height of legislative arrogance for us to pass a mandate and send (states) the bill," Alexander said. "If Congress wants to give an $8 billion-a-year tax break to the telecommunications industry, then Congress should pay for it." Sen. Mark Pryor, D-Ark., supports the Alexander-Carper amendment, spokesman Rodell Mollineau said. "Senator Pryor understands the concerns of the state and at this time supports an extension of the Internet tax moratorium," Mollineau said. "By doing so, the senator believes we can ensure that citizens are not getting unfairly taxed and that Arkansas can continue to collect revenue on telecommunications services." Sen. Blanche Lincoln, D-Ark., meanwhile, supports the Allen bill. "I am against taxing access to the Internet," Lincoln said in a statement. "If we really want to help all Americans participate in and compete in a global economy, we need to ensure that everyone has access to the Internet." -- 30 -- |
