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Susan Collins

Keep the Internet Tax Free
By Senator Susan Collins
Nov 22, 2007 - 10:50:43 AM

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Senator Susan Collins represents the State of Maine in the United States Senate.
To most Americans, the Internet is about opportunity. This amazing marriage of technology and creativity continually opens new doors to economic growth, education, and even health care. This is especially important in a large, rural state like Maine, where the Internet has proven invaluable in overcoming the barriers of distance and in enabling progress.

Unfortunately, some in Washington see the Internet as another kind of opportunity - an opportunity to tax. The question is not the authority of states to levy sales taxes on goods and services sold via the Internet, but of taxing Internet access - the very connections in homes and businesses throughout the country that help make these opportunities possible.

I am pleased that the Senate voted late last month to extend the ban on Internet access taxes for another seven years, nearly double the extension approved by the House. While this is a step in the right direction, I remain committed to seeking a permanent ban.

A moratorium on Internet access taxes was originally enacted in 1998 and has since been extended twice, in 2001 and 2004. Under the law, state and local governments are prohibited from levying access taxes on Internet connections, although purchases can be subject to applicable state taxes. Lawmakers must work together now to permanently bar Internet access from being singled out as a new revenue source.

The future of the Internet - and of the ability of Americans to seize the opportunities it offers - is at stake. The effect of taxing access to the Internet would be felt by individuals and businesses alike, but the effect of higher costs would be most sharply felt by lower-income Americans and small businesses.

In addition to higher out-of-pocket expenses for those who can least afford them, the consequences of Internet access taxes would be decreases in on-line commerce, diminished investment in new technology, and disincentives for the deployment of new broadband infrastructure.

That last point is essential to Maine, where the full benefits of the "information superhighway" are not equitably distributed to those who live on the other side of the "digital divide," those places where high-speed broadband is not yet available. That divide will never be closed if individuals and businesses are taxed out of the Internet access market.

About a year ago, I was invited to speak at a Broadband Symposium in Bangor. This event brought together leaders from a great many fields, and it was clear that the expansion of high-speed broadband is essential to the future of our state. Our merchants, manufacturers, and even service businesses, such as engineering firms, rely on it to reach new customers.

In addition, telemedicine via the Internet is invaluable to our rural health care professionals if they are to keep current with the latest research and to provide the best possible care to their patients. That is why I am pleased that the Federal Communications Commission (FCC) recently announced that it is awarding nearly $25 million in grant funding to help establish a pilot program to expand broadband Internet access to link approximately 500 rural health care facilities in Maine, Vermont, and New Hampshire. This money will greatly benefit Maine’s rural hospitals and their patients by enabling doctors to better consult with other doctors throughout New England via the Internet. In addition, the FCC also announced that it is awarding more than $3.6 million to the Rural Western and Central Maine Broadband Initiative to help provide high-speed Internet communications in that region. I am pleased to have supported both of these important projects.

We must not jeopardize the long-term opportunities of the Internet with a short-term grab for new tax revenues. While I welcome extending the ban on Internet access taxes, only a permanent ban will remove this threat to opportunity once and for all.

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