As followers of all things telecom tax and internet tax, we remain interested in how changes in the American telecom infrastructure become changes in our taxes, which in turn becomes changes in the types of tax that SureTax® calculates. So, it seems logical that today's USF becomes tomorrows Universal Internet Fund. After all, taxing communications is as American as apple pie. But, an Internet USF Tax is not a sure thing.
USF goes back to communications being a fundamental enabler of democracy and commerce. From the beginning, the founders of this country envisioned a nation that was connected with communications infrastructure. The postal service connected Americans with each other (and their bill collectors!). It was subsidized using a flat fee system, so the inexpensive letters carried across town helped pay for the letters sent across the country. The Communications Act of 1934 continued in that spirit, envisioning a system for "a rapid, efficient, nationwide, and worldwide wire and radio communication...for ALL of the people of the United States." That notion led to the Universal Services Fund (USF).
As telecom continues to go digital, the FCC wants to implement a new fee similar to USF, to enable broadband access to all across the country. It makes sense that a community without broadband today would be as disadvantaged as a community without dial tone before the days of the internet.
So, here comes the Internet USF Tax. Seems like a done deal. Some customers pay a little every month so that the people with difficult economics can also benefit from service. Simple.
No, not simple!
In 1998, Congress passed the Internet Fairness Act, prohibiting taxation of internet access! So, no tax. But, wait.... is USF a tax? The FCC says it isn't. They say it's a fee collected by carriers. So, if USF is simply a fee, then an Internet USF would be legal.
Who knows what will happen? I do know that whenever they sort this out, we'll be ready to make the calculations that keep everyone in compliance.
You can read more here....