Tax Simplification Meets Urban-Rural Divide

The House Finance Committee passed a telecommunications tax simplification bill 15-7 yesterday, according to the Washington Post, but it faces an uncertain future.

A crazy quilt of local taxes would be replaced by a flat 5% tax on all services, including previously untaxed monthly satellite television bills, Internet calling technology and long-distance service. The rub may be the tax on satellite service, which might increase the taxes paid by rural residents who presumably rely more heavily on satellite technology. Citizens with cable might see their taxes decline.

According to a study cited by the bill’s patron, Del. Sam Nixon (R-Chesterfield), “the Council on State Taxation, a Washington research group, that found that Virginia has the highest telecommunication taxes in the country. ” Nixon’s bill must now pass the full House and the Senate.

[I would have linked to the bill, but the legislative site is either down or overwhelmed as I write.]

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5 responses to “Tax Simplification Meets Urban-Rural Divide”

  1. Anonymous Avatar

    Um… Aren’t long distance telephone calls interstate commerce? Didn’t we learn our lesson with the garbage fiasco?

  2. Ray Hyde Avatar

    A uniform tax plan has got to be better than the current system of many different taxes with its associated administrative costs.

    And I don’t have a problem with the supposed rural urban issue invented here.

    But Anonymous 8:14 raises a point. Isn’t satellite communication interstate commerce?

    Then there is the pay for what you get argument. considering that subscdribers buy and isntall their own equipment, and the rest is outside the state, what service does the state provide to justify this charge?

    If we are going to tax services, let’s tax them all, Bacon’s Rebellion included. Why pick on auto mechanics, for example?

  3. Anonymous Avatar

    Darn, there goes the savings on Vonage!… I thought state gov was pushing VoIP and there wouldn’t be a taxing anytime soon…. that’s what I get for thinking!

  4. Anonymous Avatar

    Even with the five percent tax, VOIP services continue to be a huge bargain over land line and traditional wireless. This is a very interesting bill, HB 568. It is traditional tax reform — a flat rate, a broad base, and the tax treatment of all the forms of communication — phone, wireless, VOIP, pager, cable TV, satellite TV, satellite radio — all compete on a more level playing field.

  5. So which long distance call card is best………….?

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