LA to tax VoIP

In the "won't they ever learn" category the city of Los Angeles intends to levy a 9% tax on VoIP service.  The last I heard there is a federal moratorium on taxing Internet-based services so I wonder if this is even legal.  It's headed for the courts for sure I'll bet.  This measure passed when city officials snuck it onto the ballot and voters approved it with no information about it.  While public safety was cited as the need for the tax the measure does not allocate the additional taxes gathered from telephone bills for that purpose.  Politics as usual in other words.  In case you were worried about them telemarketers get a 50% break on taxes as part of the measure passed.  Only in California.

(Heartland Institute via VoIP Watch)

Comments

[Oliver]

Note that L.A. already had a 10% tax on regular landline and cellphone calls, and as part of this measure this rate was reduced to 9%. What? A tax reduction? Only in California!

[Scott_H]

Hmmm. This may not mean anything, but notice the publication date on the article? April 1.

[JimAtLaw]

Actually, the tax was mischaracterized as a tax reduction, but this was really an outright lie.

Previously, an illegal 10% tax had been imposed on some other types of phone service without complying with the mandated vote. The city had been sued to overturn this obviously illegal act, and was in the process of having its rear end handed to it in court. So, they put this on the ballot, claiming it was a "tax reduction", not only adding a 9% tax to items which had never been taxed previously even under the illegal regime, but for which there was no originally valid tax to begin with!

Why not do the same thing again from now on? Just impose every tax without complying with any legal requirements (say, 20% on pink cell phones on the first Tuesday of the month), and then you can campaign for a slightly lower percentage version, tax a whole set of new things (say, 19% on EVERYTHING), and call it a reduction!

Personally, this has in all seriousness totally destroyed my faith in our government and system of elections - if they can so utterly misrepresent something on the ballot itself, the process has been so corrupted that elections are meaningless, and we have become a banana republic.

-- Jim in L.A.

[Mike]

Levying tax on VoIP services is very much unreasonable. It is meaningless on the part of the government to do so. It creates lots of problems to the people. The government has to think about the tax and atleast reduce them to such an extant that people could afford.