If you use Comcast to access the internet, you are paying the 7 percent New Hampshire communications tax for that service. If you use Verizon Wireless or other providers to access the internet, you are not paying that tax.
Our state’s taxes must be applied equally and so it is unconstitutional to collect the communications service tax from some consumers and not from others. Add to that the fact that legislators do not want to have a state tax on internet access.
In legislation pushed by former United States Senator John Sununu, the federal government put a moratorium on the collection of taxes on internet access except in states that were "grandfathered," including New Hampshire, because they already were collecting such a tax. That ban remains in effect today but some question whether New Hampshire was actually grandfathered.
New Hampshire’s communications tax was put in place in 1990. The tax was to be applied to "two way" communications as envisioned when two people talk on old fashioned land line telephones. When the tax was initiated, few could foresee the internet and the sophisticated communications systems we use today.
Companies like Comcast self-report the collection of the communications tax from their customers. With bundled services provided to consumers, only the companies know what parts of their monthly bills are attributed to what services.
Everything was going along fine until the Department of Revenue Administration recently started doing audits on communications companies like Verizon Wireless to see if they should be collecting the communications tax for internet access services. That brought the industry to the State House to say that the tax was illegal and legislators started coalescing around the fact we never intended to tax internet access.
What to do about it? An amendment was drafted for HB 1652. The original bill would take $1.5 million from excess insurance premium taxes and fund a reduction to the wait list for services for the developmentally disabled.
After a hearing in Senate Finance Committee on Thursday, by a 7 to 0 vote, the amendment was passed. If the bill with the amendment becomes law, New Hampshire will be clearly stating that providers cannot collect the communications tax on internet access.
Advocates say passing the bill will resolve the situation where some people are taxed and others are not for the same services. They believe the elimination of the tax will foster business growth and job creation and have societal benefits as the internet is the gateway to educational opportunities and entertainment.
There is a cost to eliminating the tax on internet access. There will be $6 million less revenue from the customers of companies currently collecting the tax over the next fiscal year that begins on July 1. Another estimated $6 million will be "lost" in tax revenue that would have come from companies currently not collecting the tax if they were forced to collect it. That second $6 million is not part of the budget plan for the next year.
In the two decades since we instituted the communications service tax, the world of telecommunications has changed dramatically. The growth of the industry has been extraordinary. Chris Hodgdon, representing Comcast, said "In New Hampshire the cable industry alone has invested over $220 million during the last five years ..." The industry has been a significant contributor to our state’s economy during an economically tough half decade.
Even though it is a couple of years old, a U.S. Census Bureau 2009 report indicates 84.7 percent of individuals in New Hampshire live in a household with internet access. That is the highest percentage in the United States.
While my Odell family ancestors arrived in New Hampshire before the American revolution, my grandfather on my mother’s side landed here in 1910, an immigrant from Scotland, to work in the granite quarries in Milford.
I am not unique. We all have an immigrant story. But the story of immigrants never ends as we reflect on family experiences even as we see new immigrants arriving in New Hampshire.
A week ago, Dreaming Again, an original play based on the stories of New Hampshire immigrants and refugees from the past and present was performed at River Valley Community College. The performance was the final stop on a statewide tour that began on Apr. 13.
The play, wonderfully presented, with an ensemble of actors going from character to character telling stories in the words of men and women who came to New Hampshire from around the globe and as close as nearby Quebec, Canada. At its peak in the 19th century, the Amoskeag Mills in Manchester had as many as 15,000 employees made up mostly of newly arrived immigrants. Some European immigrants were lured here by advertising campaigns touting the riches and worry free life ahead for those moving to New Hampshire.
The play has stories, too, of refugees arriving today from little known countries in Africa and Asia most often being settled in Manchester or one of our other 12 designated resettlement communities. Except for native Americans, we all have immigrant legacies but our state and nation have a long history of challenges and issues that arise with every new flow of arrivals. The play also helps us to understand that.
The play was underwritten and presented by the New Hampshire Humanities Council through Portsmouth’s NH Theater Project.
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