NCSL Calls for Lower Taxes on Telecom Services

August 04, 2004
Steven Titch

At its annual meeting in Salt Lake City, Utah on July 23, 2004, the Task Force on State and Local Taxation of Telecommunications and Electronic Commerce of the National Conference of State Legislatures (NCSL) issued a resolution saying “high administrative costs and tax burdens imposed on the telecommunications industry create an impediment to entry for new service providers, disincentives to deploy infrastructure and increase the cost to consumers of access to advanced telecommunications services.”

The NCSL Task Force went on to say “state and local governments must strive to set tax burdens on telecommunications services, property and providers that are no greater than those tax burdens imposed on other competitive services and the general business community.” According to NCSL, “industry-specific telecommunications taxes are no longer justified.”

The complete statement can be found at http://www.ncsl.org/programs/fiscal/teltaxreform.htm.

The Heartland Institute applauds NCSL’s call for lower and less complicated taxes on telecommunications services. Technological change has ended the era of telecom monopolies, as well as the era of being able to tax telecom services heavily without distorting investment decisions or consumer behavior.

Efficiency and fairness both demand that all telecommunications service providers be subject to a uniform and limited set of taxes and regulations, without regard to their past history or the network technology they use. NCSL has given us a clear policy path that will promote growth, investment, and choice for consumers and businesses everywhere.

In its policy statement, NCSL acknowledges telecom service today is no longer merely a phone and a wire, but rather a highly flexible and integrated group of networked applications that drive our national economy and add to our quality of life. It is pointless to divide and differentially regulate service providers according to the specific technology they use to connect customers, when all of them together are competing for the same consumer and business dollars.

It makes little difference to consumers whether their calls, email, and Web transactions are circuit- or packet-switched, or travel via copper, radio, or coaxial cable. NCSL, with admirable clarity of vision, has declared these differences should mean little to regulators and lawmakers as well.


Steve Titch (titch@heartland.org) is managing editor of IT Update and a senior fellow with The Heartland Institute.