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June 24, 2004
Florida To Tax Home Networks

Wired carries a report this morning from Michelle Delio that the state of Florida, in order to recover lost revenues from businesses that use their own networking architecture rather than the local phone companies (and the tax they carry), enacted a law taxing the do-it-yourselfers. Now the state is considering applying that law to homeowners who string wires between their PCs:

Florida state officials are considering taxing home networks that have more than one computer, under a modified 1985 state law that was intended to tax the few businesses that used internal communication networks instead of the local telephone company.

Officials from Florida's Department of Revenue held a meeting on Tuesday to see whether the law would apply to wired households, and exactly who would be taxed. About 200 people attended, including community and business representatives. ...

The law is so broad that it would apply to networked computers, wireless services, two-way radios and even fax machines -- or "substitute communications systems," as the state calls them. The tax would be applicable (PDF) to the costs of operating such a substitute communications system, not to the purchase of the system's components.

Well, thank the Lord I don't live in Florida -- I have both a hardwired and wireless network inside my house. I can't think of a dumber application for tax revenue than computer networking. First off, the components tend to be a little pricey, which creates sales-tax revenues. People use these networks to shop on line and create their own revenue, which brings in taxes on both. Most of the people I know create these networks to take advantage of their broadband internet connections -- most of which have their own state and federal tax anyway.

However, as Delio notes, all considerations of logic and proportion go out the window when the state looks at the potential $1 billion in revenue an expansion of the network tax would bring. It's another example of the junkie nature of government at all levels; like any other addict, all they care about is their next fix.

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Posted by Ed Morrissey at June 24, 2004 12:59 PM

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Tracked on June 24, 2004 2:39 PM

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