It’s Official!

It’s Official! was Originally Posted on September 10, 2013 by lavarock

Years ago I worked at a large computer company. In the mail room on every floor, was a Xerox machine for creating copies. There were cases of paper next to it. Many departments had a page printer which used fanfold paper. Then we installed those big laser and inkjet printers which use regular paper. Almost overnight all that extra paper in the mail room was appropriated for the new printers. The problem is that the cost of the paper shifted from the computer department (printers) to the maintenance department (copy machines). Nobody told the maintenance department and when they found out, invoices were created!

The ZdNet headline is “VoIP is giving the states heartburn” and the reason is as you might guess.

Similar to the problems involved in taxing Amazon, who does not have an office in their state, how do states tax Voice Over IP telephone service when it rides inside another service?

When our state telephone system was for sale, I was amazed that a group bought it. Hardwired telephone service seems to be disappearing quickly and with it, state and local taxes. The state can’t follow a wire and find VOIP customers. There is no hardware in the city specifically for VOIP.

Even YOU can become a Voice Over IP provider, with no hardware and little electronic or functional experience. I am a VOIP provider, if I want to be.

Taxing is involved in almost everything you do. Park your car and you pay the meter. That’s a tax. Want to drive, you need a license. Want to start a business? How about buying gasoline, electric service, telephoning people? They all have taxes associated with them.

When one tax disappears, another takes its place.

As I have said in other blog entries, You can now use a $10 unit and $1 a month. Then paying a penny a minute for calls, there are no other charges or taxes or fees (yet). If you want, you can even get free telephone service with a $30 box. If I want 911, I can pay a bit extra to get it, but it is not forced on me. Neither are charges for rural telephone service, TDD service or other interstate fees and so on.

Remember the payphone? Cellphones made them useless and inconvenient unless you were a drug dealer. Your wired telephone may soon follow suit.