Principles of Telecommunication Taxation Exposed

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The Statement of Principles of Telecommunication Taxation was adopted by ALEC's Telecommunications Task Force on May 16, 1992 and was included in the 1995 Sourcebook of American State Legislation. ALEC has attempted to distance itself from this piece of legislation after the launch of in 2011, but it has done nothing to get it repealed in the states where it previously pushed for it to be made into law.

ALEC Bill Text


In a world where our national, state and local prosperity increasingly depends on competitiveness in global markets whose currency is information, a strong ubiquitous telecommunications infrastructure is critical to our states and their citizens. In a number of ways, government policies fashioned in an earlier and far simpler telecommunications environment are being outpaced by the rapid technological and business developments that are driving the Information Age. Among the outdated policies which retard the development of telecommunications infrastructure are discriminatory state and local tax policies.

The historic monopoly status of local companies has rapidly eroded.

The traditional tax treatment of local telephone companies is inappropriate on today’s marketplace of multiple telecommunications providers.

Local telephone companies should not be used as utilities, but rather as members of the general business community.

Special tax assessments, distinctions, fees and categories unfairly disadvantaged local telephone companies in competition with alternative telecommunication providers.

Discriminatory tax treatment of local telephone companies adversely impacts the public interest by weakening the public network to the benefit of private and alternative networks.

Taxes levied on local telephone companies should be uniformly applied to all providers of telecommunications products and services.

{On May 16, 1992 the Task-Force on Telecommunications adopted the above taxation principles for local telephone companies.}