Internet Tax on the Horizon?

Seems the Federal Communications Commission (FCC) is still sniffing around for more things to tax, and a “broadband fee” is high on the list of potentially new revenue sources.

FCC Chairman Julius Genachowski, you see, is big on expanding broadband access, and he thinks expansion of internet access a really big deal (It is.), and a bit of infrastructure expansion that is most necessary.

So, in this regard, FCC is considering some sort of “broadband” fee on we and thee, and is also thinking about taxing text messaging, as well as levying a flat fee on each phone line.

“Today we propose three goals for contribution reform:  efficiency, fairness, and sustainability,” quoth Genachowski.  “And we underscore that any reforms to the contribution system must safeguard core Commission objectives, including the promotion of broadband innovation, investment, and adoption.”

Some speculate that FCC just might be running afoul of the Internet Tax Freedom Act, a 1998 law that bans the government from taxing internet access.  Which leads, of course, to the inevitable argument over whether the suggested levy is a “tax,” or just a “fee.”

Any ideas, Justice Roberts?

Moving right along, we hear the Congressional Budget Office (CBO) is once again out with some new – and scary – numbers.

CBO says Medicare spending will almost double over the next decade, and Medicaid will more than double.  In toto, healthcare entitlement spending could reach a staggering $1.8 trillion in 2022!  As the Tax Foundation reports, this means that healthcare spending will overtake all discretionary spending (including defense, law enforcement, infrastructure, etc.) in 2016!

And Congress languishes on vacation, while the rest of the politicians just keep running for the next office.

And if that isn’t enough to make your day, you high income California folks out there might be on the lookout for the latest inquiry to hit your mailbox soon, if it hasn’t already.  We hear the Board of Equalization has sent letters to some 27,000 high-income resident earners who reported no use tax in 2008, 2009 or 2010.  They just can’t imagine, we guess, that such folk didn’t buy something (likely by mail order or internet) which came along with no sales tax, and regarding which they were therefore obligated to fess up and pay use tax to the California Revenooers.  The letter explains what use tax is, how it works, and suggests that the recipient “share” a copy with their tax preparer.

CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters.  You should consult your CPA regarding the implications to your own particular situation.

Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno.  He may be reached at 831-7288, welcomes comments at, and invites readers to consider his other commentary at

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