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The only other products that government taxes at a higher rate than general business are tobacco and alcohol, so-called sin taxes. State and local policymakers
make a social choice by taxing tobacco and alcohol consumption at higher rates to
discourage usage of these products, as overuse usually  has a high societal cost. Is that the message that policymakers want to send about communications and  technology? “Do not use your cell phone...Stay away from technology.” State and local governments are addicted to the discriminatory taxes on telecommunications. We need to break this cycle of addiction and stop punishing consumers for using
technology.

The National Conference of State Legislatures, for which I co-chair the
Task Force on State and Local Taxation of Telecommunications and Electronic
Commerce, has called upon state legislatures to work with local governments and providers to simplify and modernize state and local taxes on telecommunications
based upon on the following principles:

1. Tax Efficiency: State and local taxes and fees imposed on telecommunications
   services should be substantially simplified and modernized to minimize confusion
   and ease the burden of administration on taxpayers and governments.

2. Competitive Neutrality: State and local transaction taxes and fees imposed on
   telecommunications services should be applied uniformly and in a competitively
   neutral manner upon all providers of telecommunications and similar services,
   without regard to the historic classification or regulatory treatment of the entity.

3. Tax Equity: Under a uniform, competitively neutral system, industryspecific
   telecommunications taxes are no longer justified.

4. Tax Fairness: With the blurring of distinctions between various services
   and technologies, state and local governments must strive to set tax burdens
   on telecommunications services, property and providers that are no greater than
   those tax burdens imposed on other competitive services and the general
   business community.

5. Local Government Impacts: States need to include provisions to mitigate
   potential local government revenue impacts associated with telecommunications
   tax reform.

In August, I assumed the presidency of NCSL, and I pledge to highlight during my tenure the need for government to break its dependency on discriminatory telecommunications taxes and reduce the need for burdensome regulation. State elected policymakers must ensure that state regulatory and tax policy does not
influence consumers’ selection or use of one specific communications technology
or service over another. By leveling the playing field for all providers, competition will prevail, the so-called digital divide can be eliminated, and Americans will reap the benefits of a stronger economy.

"State and local governments are addicted to the discriminatory taxes on telecommunications. We need to break this cycle of addiction and stop punishing consumers for using technology."