WASHINGTON, Jan. 28 (UPI) -- A U.S. Congressional committee has proposed extending a telecommunications tax to all Internet and data connections, CNet.com reports.
Right now, the 3 percent excise tax only applies to traditional telephone service, but the Joint Committee on Taxation said in a report on Thursday that it could be extended to cover "all data communications services to end users," including broadband; dial-up; fiber; cable modems; cellular; and DSL (digital subscriber line) links.
Technological developments may justify extending the tax, the committee said.
"Cellular phones are being manufactured that may operate using VoIP through Wi-Fi access, as well as through more traditional means," the tax committee's report says. "As voice phone service migrates to using Internet Protocol, there may be no way to distinguish 'packets' of voice and 'packets' of data." With VoIP users make telephone calls through a broadband connection.
The tax was originally enacted in 1898 to pay for the Spanish American War. It was repealed in 1902, but was reinstated at a rate of 1 cent a call in 1914 to pay for World War I, and eventually became a permanent 3 percent tax in 1990.
