A Permanent Moratorium on Internet Taxes Will Benefit Consumers and Increase Broadband Access

WASHINGTON - A permanent moratorium on the taxation of Internet access services will benefit consumers and businesses by lowering prices and delivering more choices, a Verizon executive testified before a hearing of the House Energy and Commerce Committee Wednesday (May 23).

"Making the Internet tax moratorium permanent will ensure that regressive new tax burdens are not imposed on lower-income Americans," said Annabelle Canning, vice president, state tax policy at Verizon.  "A permanent moratorium will send a strong, pro-investment signal to Internet entrepreneurs who depend on affordable broadband access.  And it will prevent the imposition of excessive new taxes and administrative burdens on businesses that compete in the global economy." 

Canning testified on behalf of Don't Tax Our Web -- a diverse coalition of consumer, taxpayer, small-business and technology industry advocates, including Verizon -- which supports legislation to make the Internet tax moratorium permanent.

Other supporters include the 60 Plus Association, American Electronics Association, AT&T, Comcast Corp., Corning Inc., CTIA - The Wireless Association, Direct Marketing Association, eBay, FreedomWorks, Information Technology Association of America, National Association of Manufacturers, National Cable and Telecommunications Association, National Taxpayers Union, NetChoice, Small Business & Entrepreneurship Council, TechNet, Time Warner Communications, U.S. Chamber of Commerce, United States Telecom Association and Yahoo. 

Enacted in 1998 to promote the expansion of Internet access by preventing excessive and inconsistent taxation of these services, the Internet Tax Freedom Act is set to expire on November 1.  Since its enactment, the act has contributed significantly to the rapid development of high-speed broadband networks and the Web-based applications that use these networks.  This, in turn, has boosted the productivity of American businesses and lowered consumer prices through competition.

Unfortunately, several states and municipalities have ignored the Internet Tax Freedom Act and are imposing excessive and discriminatory taxes on Internet services.

Economists, consumer and small-business advocates, and industry groups have expressed similar concerns that imposing taxes on Internet access stifles investment in and expansion of broadband access and harms consumers - particularly low-income consumers - by raising prices, limiting access and widening the "digital divide."

To permanently extend the Internet tax moratorium, Sens. Ron Wyden, D-Ore., John Sununu, R-N.H., and John McCain, R-Ariz.; Reps. Anna Eshoo, D-Calif., and Robert Goodlatte, R-Va.; and more than 30 other original co-sponsors introduced in January bipartisan legislation titled the Permanent Internet Tax Freedom Act of 2007, S. 156 and H.R. 743.

Verizon strongly supports this legislation.

Verizon Communications Inc. (NYSE:VZ), headquartered in New York, is a leader in delivering broadband and other wireline and wireless communication innovations to mass market, business, government and wholesale customers.  Verizon Wireless operates America's most reliable wireless network, serving 60.7 million customers nationwide.  Verizon's Wireline operations include Verizon Business, which delivers innovative and seamless business solutions to customers around the world, and Verizon Telecom, which brings customers the benefits of converged communications, information and entertainment services over the nation's most advanced fiber-optic network.  A Dow 30 company, Verizon has a diverse workforce of more than 238,000 and last year generated consolidated operating revenues of more than $88 billion.  For more information, visit www.verizon.com.