On July 1, the Permanent Internet Tax Fairness Act is going to apply to 7 grandfathered states that were still collecting taxes on broadband services

A Q&A with Steve Lacoff, general manager of communications at Avalara (which provides cloud-based software tax compliance), on the Permanent Internet Tax Fairness Act.  

On July 1, the Permanent Internet Tax Fairness Act is going to apply to seven [grandfathered] states (HI, NM, ND, SD, OH, TX, and WI) that were still collecting taxes on broadband services. It is roughly $550 million, which is not insignificant, particularly in the current environment as states are extending deficit spending and budget gaps are widening. When asked "Is this a good thing for ISPs in these states since it is one less line item fee on their customers’ bills?" Lacoff said, "Yes, it is a good thing for the ISPs and a good thing for the consumer. But there are two sides of the coin. The reality is that if you look at a whole range of legacy telecom services, the whole basis [of the law] was to spur adoption of internet access and promote rural penetration. The counter to that argument is that, ‘Hey, given that we are at 82% broadband adoption today, does this type of policy still make sense?’"