Florida pokes a hornet's nest

I've been writing for some time about the looming battle over local and state telecom taxes. As more traditional telecom services move to the Internet, the telecom taxes that localities and the state have become so fond of just disappear. I've yet to talk to an elected official who A) understands this, or B) has a plan for dealing with it.

Florida state officials have knocked a telecom tax hornet's nest off the tree, and are about to start poking it with a stick, unless someone comes to their senses.

You need to read the whole article in Wired to get the full story, but briefly, an old telecom law enacted well before the Internet allows the state to tax business telecom networks. It was intended to collect taxes from businesses with their own PBX, but is so broadly written it applies to home business networks as well, and beginning in July, state tax officials may start taxing home-based businesses for having a desktop computer, a laptop, and a printer on a local network.

Aside from the fact that many small business taxes are inherently unfair (for example, in Blacksburg, a home based business gets taxed by the town on gross revenues, but a next door neighbor with a salary of the same amount pays nothing), home-based businesses are one of the fastest growing parts of the economy, and small business generally is creating between 75% and 90% of all new jobs, depending on who you ask. So a strategy of layering more taxes and paperwork on your economic development engine is probably not a good idea.

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