Internet tax ban is headed for passage
CONCORD — After a long and complicated journey, the Internet tax ban is headed for passage.
In a committee of conference Tuesday, Senate and House negotiators voted unanimously for a bill that is an amalgam of economic priorities for the two chambers.
In addition to banning an Internet tax, House Bill 1418 increases the threshold at which the business enterprise taxes are applied, from $150,000 to $200,000 in revenue; extends a commission examining business taxes; transfers $1.5 million in insurance premium tax revenue to provide services to the developmentally disabled; and allows businesses to apply the IRS 179 expense deduction to calculate gross business profits.
The Internet tax was a high priority for the Senate, while increasing the BET threshold was a House priority.
The bill makes it clear that Internet service is not subject to the communications services tax.
Some companies have been collecting the 7 percent communications services tax on wireless data and bundled telecommunications plans, while other companies have been told by the state Department of Revenue Administration they need to collect the tax on two-way communications, which the state began collecting in 1990.
The bill would prohibit taxing access to the Internet through wireless or broadband connections, but would allow the state to continue taxing two-way wireless phone use, other voice communications and text messaging.
The House had tacked the Internet tax ban onto several other bills in the final weeks of the legislative session, as a way to win Senate passage of its priority bills.
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