Like Tom Cruise in the movie Jerry Maguire, federal, state and municipal taxing authorities are asking IP enabled voice and video services to ‘show them the money.’
At the Federal level, the IRS recently sought comment on whether the Federal Excise Tax ("FET") should apply to the many forms of VoIP. The FET was originally imposed to pay for the 1898 Spanish American War. At the time the tax was first enacted – it applied to approximately 2,000 telephone lines. Over a hundred years later, millions of American continue to pay this 3% surcharge assessed on their local and long distance telephone bills.
In addition to the FET, of course, communications providers must also apply a 10.7 percent Universal Service Fund fee, subscriber line charges, relevant of state and municipal telecommunications taxes, surcharges and other fees that, all totaled, add upwards of 40 to 50 percent to the total cost to the consumer. It’s this combined tax burden that lead one telecommunications CEO and
