Amended Internet Tax Ban Will Not Include VoIP

Spritzer writes "Yesterday, the House Judiciary Committee approved an amendment to the Internet Tax Freedom Act of 1998 which would prevent the tax ban from expiring. However, the amendment also eliminates tax protection for VoIP services. 'The amendment, offered by committee Chairman John Conyers Jr., a Michigan Democrat, would extend the ban on Internet access taxes until Nov. 1, 2011. ... The Conyers amendment would allow nine states with Internet access taxes to continue them. It would also narrow the definition of Internet access, excluding services such as VoIP from the tax ban.'"

When is VOIP not VOIP?

[Captain Zep]

The idea that some internet based services are taxable and some aren't, when there's no reliable way to classify them makes for a rather broken system.

If pure VOIP starts getting taxed, then it'll just be adjusted so that it's not technically a VOIP service. E.g. is it VOIP if it includes video? What about in-game voice systems? What if it does some random surfing in the background at the same time? Is a system that sends voice clips via email a VOIP system? What if I'm exchanging music or sound effects - do they count as a 'voice'?

Z.

Re:Exclude VOIP?

[Beyond_GoodandEvil]

Hmm - how does Voice Over Internet Protocol not constitute internet access?
You looking at this the wrong way, this isn't about rational laws, this is about states seeing a decline in revenue due to people giving up their (taxed)landlines for VOIP(currently untaxed). So to keep the state coffers full, we slip in an exemption for VOIP so states can keep collecting money on phone service.

Makes sense to me

[drhamad]

This actually makes sense to me, as much as most of /. will hate it. It means states, and even the feds, can't insert taxes on access or on most things, but it excludes from that ban a service which has a direct analogue in the ... analog world. Taxes on phone services such as the Universal Service Fee go (at least theoretically) to extending access to people that don't have it.

Here's what it really comes down to - as taxes decrease from one source, they must increase from another. The government isn't spending less money, so if less people have phone lines, they must make up the money some other way. Like it or hate it, that's the fact. And yes, this means that eventually, there will probably be an internet sales tax. It's just a matter of what congressmen are willing to be vilified in the eyes of the public, in order to get it done. And if there isn't, it just means income tax (both fed and especially state) must be increased, or some other form of taxation found. Your tax burden in general should never be decreased - it's just a matter of how it's taken from you.

When will they ever learn?

[Dr. Mu]

Sung to the tune of "As Time Goes By":

You must remember this:
A bit is just a bit,
A byte is just a byte.
The fundamental things apply,
As packets go by.

Trying to identify bits for their "content" is a little like trying to tell air molecules apart. Congress is now on the same slippery slope as the Bells, who want to charge extra for "premium" content.

Or do they they think the taxes can be collected by the VOIP companies themselves? But what if my VOIP provider is in Outer Elbonia? They have no infrastructure in my state, or any nexus, for that matter. If I pay my phone bill with a credit card or, better yet, by cash deposit on my next trip there, where's the mechanism for enforcement?

Again, Congresspeople, just because something scratches an itch and sounds "fair" doesn't mean it's even a tiny bit workable.

I'm confused!

[goldspider]

The prevailing groupthink tells me that taxes are good, and the internet is good, but taxes on the internet are bad!

That violates the very laws of multiplication, and could threaten the universe as we know it!

Re:Makes sense to me

[goldspider]

"Here's what it really comes down to - as taxes decrease from one source, they must increase from another."

Why?

"Your tax burden in general should never be decreased - it's just a matter of how it's taken from you."

Why?

Perhaps I'm taking you out of context, but to suggest that taxes should never be decreased... well it's just wrong.

Re:Read my lips

[TimeTraveler1884]

Honestly, I'm tired of all this tax BS. Tax my net income and be done with it. Having taxes simplified would in fact save money for all. Just think about all the money spent on supporting, enforcing, collecting, evading and what-not, on multiple taxes. I know, I know, I'm thinking like an engineer and not a politician or tax-attorney.

Re:VOIP-to-POTS mod parent up insightful

[Anonymous Coward]

finally someone gets the jest of it. this article proves just how dumb so many slashdot users are. it's pathetic to see what some people have come up with as a solution. it proves that they didn't even understand the problem.

it's getting really lame around here.

Re:Read my lips

[Amani576]

You make a very valid point... I never really thought of it that way.
Especially considering that I've been somewhat of a supporter of the fair-tax plan.
Thanks for the input... I'll really keep that in consideration.
GR