Muni Group Sees Big Web-Tax Fallout

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The National League of Cities predicted a billion-dollar financial impact on
local cities if a new federal ban on Internet taxation passes with its current
language.

The Internet Tax Freedom Act sunsets Oct. 31, and lawmakers are working on a
new version, according to the NLC’s Juan Otero. That version would ban taxation
on "any means" to reach the Internet.

Otero warned members of the National Association of Telecommunications
Officers and Advisors in Denver Friday that the phrase is so broad that it could
prevent cities from assessing utility user taxes and gross-receipts taxes.

The Baby Bells successfully lobbied for the language in H.R. 49, he said,
adding, "They’re pushing hard to get this done."

If passed as written, "This will result in franchise-fee litigation all over
the country," Otero predicted.

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