Internet telephony supporters won a big victory in Florida last week when legislators voted in favor of repealing part of a communications tax on businesses that run their own networks.
The State House of Representatives voted unanimously on House Bill 49, which removes the tax from Florida’s tax code. Bill sponsor John Stargel, a Republican in the Florida House of Representatives, said the move would encourage growth and investment in the state. The bill will have to now be thought to be by the state Senate, expected to weigh it next month.
The complex tax dates back to telecommunications deregulation in the 1980s. The statute used to be originally intended to tax companies that bypassed the native telephone community through setting up their very own communications networks.
While it was originally written with technologies such as satellite and microwave in mind, critics have argued that it could be applied to businesses carrying voice traffic over their IP data networks, as well as individual customers of companies like Vonage that provide voice over Internet Protocol services, which route phone calls over the less-expensive, less-regulated Internet.
Critics also argue that the language of the so-called Substitute Communications Tax could be applied to businesses with networked computers, two-way radios and wireless dispatch systems.If the legislation is exactly enforced, the added price may cripple small businesses all the way through the state and stifle economic building, mentioned Florida TaxWatch, a trade-supported group that intently monitors state spending and helps the repeal.
Last year the tax brought in about $352,000, but if enforced under stricter guidelines, it could jump as high as $500 million, according to Florida TaxWatch. Money from the tax would pass to state and native movevernments, in addition to toward the development and protection of public schools.
At the end of the 2004 legislative session, the Florida Senate passed a bill that would have prevented collection of the tax until 2006, and sent it to the House. But former House Speaker Johnnie Byrd refused to consider it.