New Hampshire is mulling a seven percent tax on Internet and telephone services including instant messaging, online chat, Web-bases e-mail, and voice mail.
“It’s not [our position] that it’s applying the [existing state telecommunications law] to new things,” said New Hampshire Department of Revenue spokesman Val Berghaus. “Rather, that it’s clarifying that the law did apply to these things even though they were not expressly stated in 1990,” when the current state telecommunications tax was enacted.
Indeed, there was such an uproar over Revenue’s proposal that the department decided quickly enough to leave it up to state lawmakers whether such a tax should be written and passed.
New Hampshire Internet Service Providers Association president Carol Miller told USA Today that the proposed seven percent tax would burden ISPs heavily and force them to separate Internet services from basic Internet connections. "They have traditionally taxed the phone line service, the actual line," she told the paper. "Now they are looking at taxing Web mail, chat, instant messaging, and wireless Internet. We think this is far beyond the scope of what the tax was meant for."
So does the Manchester Union-Leader, the statewide daily, which thrashed the proposal in a July 13 editorial.
“It is being dubbed a ‘chat tax’,” the editorial said. “The (Department of Revenue) wants to tax e-mail, voice mail, Web mail and online chats, which it classifies as two-way communication, and therefore subject to the communication services tax. The department claims it is just applying the existing law to activities that should be taxed but are not. But the department already taxes Internet service. Taxing chats and e-mail would double-tax those services.”
The editorial said New Hampshire was “lucky” to have its existing telecommunications tax and should, instead of looking for “new human interactions” to tax, think about “getting more serious” in cutting wasteful state spending.
