COPYCENSE

"An influential congressional committee has dropped a political bombshell by suggesting that a tax originally created to pay for the Spanish American War could be extended to all Internet and data connections this year.

"The committee, deeply involved in writing U.S. tax laws, unexpectedly said in a report (.pdf) Thursday that the 3 percent telecommunications tax could be revised to cover ‘all data communications services to end users,’ including broadband; dial-up; fiber; cable modems; cellular; and DSL, or digital subscriber line, links.

"Currently, the 3 percent excise tax applies only to traditional telephone service. But because of technological convergence and the dropping popularity of landlines, the Joint Committee on Taxation concluded in its review of tax law reforms that it might make sense to extend the 100-year old levy to new technologies. The committee did not take a position on whether Congress should approve such an extension and simply listed it as an ‘option.’"

Declan McCullagh. Congress Proposes Tax on all Net, Data Connections. News.com. Jan. 28, 2005.

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