Voinovich, Taft try to block ban on Internet tax

Columbus Dispatch ^ | 06 November 2003 | Jack Torry

[Deadeye Division]

Voinovich, Taft try to block ban on Internet tax
Thursday, November 06, 2003
Jack Torry
THE COLUMBUS DISPATCH

WASHINGTON — Sen. George V. Voinovich and Gov. Bob Taft are engaged in a battle with the White House and many congressional Republicans over a bill that would prohibit states from taxing any system that provides consumers access to the Internet.

The Ohio Republicans warn that the prohibition could cost Ohio’s budget $75 million annually.

With the Senate opening debate on the measure today, Voinovich and a handful of senators will maneuver to block the bill or modify it in a way that would be acceptable to Taft and other governors across the country.

By doing so, Voinovich finds himself at odds with the Bush administration, which enthusiastically endorsed the bill yesterday. Treasury Secretary John W. Snow and Commerce Secretary Don Evans said "keeping the Internet free of multiple or discriminatory taxes will help create an environment for innovation."

State and local officials have sharply criticized the bill, co-sponsored by Sen. George Allen, R-Va., and Sen. Ron Wyden, D-Oregon, contending it would cost them billions of dollars during the next four years. They argue that the federal government has no business exempting a potential source of revenue for state and local governments.

Voinovich has backed a 1998 suspension of state and local taxes on companies providing Internet access. But that suspension essentially covered only dialup Internet access that was in regular use at the time. Since then, companies have begun offering Internet access through a variety of technologies — digital subscriber line, coaxial cable, wireless and satellite.

The Allen-Wyden bill, as well as a similar measure passed this fall by the House, would expand the 1998 ban to all systems offering Internet access. Critics contend that such a broad prohibition would permit telecommunication companies to evade some current state and local taxes by claiming that all their services are part of an Internet access package.

In a letter to Voinovich last month, Taft wrote that the bill "would be devastating to Ohio and other states."

Voinovich said yesterday the Allen bill would inflict an unfunded mandate on beleaguered state officials by eliminating a source of revenue as governors struggle to balance budgets caused by the 2001-02 recession.

Describing Snow’s statement as "shortsighted," Voinovich said states would be forced to cut education spending, raise taxes or plead with Congress for financial help.

"I don’t think Snow realizes the impact," Voinovich said.

He also warned that the bill’s definition of what constitutes Internet access is so complicated that it was unclear which state taxes would be affected.

"This thing is so complicated that a bunch of people are going to vote on it without knowing anything about it," Voinovich said.

He expressed irritation that proponents of the bill are claiming that he hopes to clear the way for states to tax e-mail.

"There is no intention to tax e-mail," Voinovich said.

jtorry@dispatch.com

[Semper Paratus]

First should introduce a bill making Lake Erie the new location of the Petroleum Oil Reserve.

[WhiteGuy]

GOP leadership in Ohio at it's best.

Did anyone hear Ken Blackwell yeaterday on the Limbaugh show?

Ohio will be a pivitol state in 2004.

If the gop wants to win ohio at all levels..............

This approach will have to end.

I promise, neither of these two boobs deserve my support or vote.

[Orangedog]

I hope Taxt and Voinabitch enjoy what remains of their political careers. I'll be voting against both of them next time they come up for re-election. I don't care who runs against them, who ever has the best chance of beating them gets my vote. The GOP will have to concentrate on picking up another senate seat in another state to make up for the one they will lose in Ohio.

[LS]

Sigh. More calls to make to these idiots. What the hell are they doing, except being greedy?!

[Deadeye Division]

Voters decide against Issue 1

http://www.freerepublic.com/focus/f-news/1015647/posts

[steve50]

Don't forget to show DeWhine he needs back in the private sector as well. What happened to the republican party in Ohio? These guys are pathetic.

[Orangedog]

And these two idiots really don't know why companies are leaving Ohio. No business in their right mind is going to set up shop in a state that is hostile to business in the first place, but also has a governor who is salivating at the prospect of taxing internet service too, something that most businesses have to have.

[hankbrown]

I agree - Taft especially is a clown.

[Pan_Yans Wife]

The Ohio Republicans warn that the prohibition could cost Ohio’s budget $75 million annually.

This is similar to how when women go shopping, they SAVE money, while buying something on sale, that they don't need, but they feel vindicated, like the ten dollars off made the purchase worth it.

How can the prohibition COST them money, if not enacted? Aren't they saying that the prohibition would lose them TAX revenue? Isn't tax revenue a bad idea?

[LS]

At least the voters didn't approve the giveaway to Taft's buddies called "Issue 1."

[hankbrown]

How can the prohibition COST them money, if not enacted? I believe that Ohio is currently exempted from the federal moratorium. There is currently a tax on certain internet products and services which was in effect before the federal moratorium and was not subject to the moratorium. I think this new bill must remove that exemption.

[Sunshine Sister]

The states have done without this money to this minute. Why is it such an issue? Can't they cut spending to get back in better financial position? Oh wait.....silly me! I'm to stupid to understand how government runs!

[paguch]

In a letter to Voinovich last month, Taft wrote that the bill "would be devastating to Ohio and other states."

Voinovich started to devastate Ohio and Taft is finishing the job.

[oceanview]

calm down folks.

this part of the debate is about one thing: CONSUMER VOICE OVER IP. people are dumping their traditional phone service in favor of these offerings from Vonage or their cable companies, about 40% cheaper and no telco taxes. Does anyone really think government is going to give up the taxes on consumer voice service? No way.

Better to allow the same taxes that apply to traditional telephone service to apply to VoIP, and get a bill that continues the moratorium on sales tax, and thwarts any attempt to have a more general internet access or email tax.

As it stands now, we might open up a can of worms and allow all of these taxes to come through the pipe, in some useless attempt to stop VoIP telco taxes, which are inevitable anyway.

[GreenLanternCorps]

Taft is term limited.

[oceanview]

no they have not. they collect local phone service taxes, but as people dump their local phone service, they lose that tax revenue. this is just an attempt to level the playing field as people move to the newer technology.

[Orangedog]

Taxt is a fool if he thinks that the issue 1 failure wasn't about him. They spent $3 million to promote it, there was no organized opposition or advertising against it and it still failed....mostly because his mug was on tv promoting it.

[hankbrown]

. . . mostly because his mug was on tv promoting it.

Yes, Issue One would probably have passed in a flash if the promoters had not attached the Taft name to the initiative.

[Orangedog]

Better to allow the same taxes that apply to traditional telephone service to apply to VoIP, and get a bill that continues the moratorium on sales tax, and thwarts any attempt to have a more general internet access or email tax.

Screw them. The less money they get, the better I like it. One of these days they might actually have to (GASP!) cut spending.