FCC Advisory Panel Releases Model Legislation to Tax Internet-Dependent Firms

Chris Gaetano
Published Date:
Dec 13, 2018

The Federal Communication Commission's Broadband Deployment Advisory Committee has released draft model legislation that would enable states to tax firms dependent on companies that depend on the internet, the proceeds from which would go into state rural broadband deployment funds that would help bring faster internet access to sparsely populated areas, according to Ars Technica. The legislation would apply to any firm deemed a "broadband dependent" service, which is defined as a subscription-based retail service for which consumers pay a one-time or recurring fee, and it also includes any advertising-supported service that requires the capabilities of the broadband service that the consumer has purchased.

Ars Technica said that AT&T, a representative of which sits on the committee, stands to gain the most from the model legislation if adopted by state governments, as it would add state funds to the millions of federal tax dollars it already receives for providing broadband services to rural areas. AT&T argued that internet companies are not paying their fair share for the infrastructure on which their businesses depend. Google Fiber, which also has a representative on the committee, objected to the measure, saying that it would essentially tax everyone with an internet connection, and funnel online sales taxes away from general funds and into dedicated broadband deployment funds. 

FCC Chair Ajit Pai is unlikely to support the measure, as he generally has been against taxing nternet services, but Ars Technica said the committee does not need his approval to release the model legislation. 

Click here to see more of the latest news from the NYSSCPA.