Vonage To Fight Baltimore's Effort To Tax Its Internet Phone Service - InformationWeek
IoT
IoT
Software // Enterprise Applications
News
12/21/2006
03:42 PM
50%
50%
RELATED EVENTS
Free Yourself from Legacy Apps
Jun 08, 2017
They've served their purpose years ago, but now they're stretching your IT budget and increasing s ...Read More>>

Vonage To Fight Baltimore's Effort To Tax Its Internet Phone Service

Vonage won a court battle more than three years ago in which a federal judge ruled that Vonage's service was an information service, not a telecommunications service.

When it was revealed this week that the city of Baltimore is suing Vonage to collect a $3.50 monthly tax for subscribers using its Internet phone service, the city opened up an issue that has defied resolution for years.

Baltimore instituted the tax on all phone lines in 2004, but apparently didn't file the lawsuit until recently.

"The service that Vonage is providing clearly fits the definition of a telecommunications line," said Joshua N. Auerbach, an assistant city solicitor, according to media reports.

Not so, says Vonage, which claims it is an information service and therefore exempt from taxes. Vonage won a hard-fought battle in a federal court in Minnesota more than three years ago in which the judge in the case ruled that Vonage's service was an information service.

However, the tax issue keeps raising its head, particularly as long distance charges drop and VoIP services like Skype continue to eat into traditional telephone company services and revenue. The drop in telecom taxes has hit hard the Universal Service Fund, which is used to subsidize telecommunications in rural areas.

FCC chairman Kevin Martin has suggested that telephone numbers could be taxed instead of phone lines. That approach would concern Vonage, which issues phone numbers, but not peer-to-peer VoIP providers like Skype, whose users normally don't use numbers.

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of Data and Analytics
Today's companies are differentiating themselves using data analytics, but the journey requires adjustments to people, processes, technology, and culture. 
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on InformationWeek.com for the week of November 6, 2016. We'll be talking with the InformationWeek.com editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll