Tax Horror Stories

Wisconsin's "Double Tax"

Wisconsin is collecting a 5% sales tax on access to the Internet. Their justification of taxation on Internet access is derived from it being seen as the same thing as telephone and telecommunication services. This means that the Wisconsin resident is paying his or her taxes twice, once for the phone tax and then again for the Internet use tax, which is prohibited under the Internet Tax Freedom Act enacted by the Congress of the United States.

The governor of Wisconsin vetoed a tax cut package that was sent to him in the year 1998 to repeal this ridiculous tax. The present state legislature feels that he might be more prone to overturn this tax now than he was two years ago, but that is all speculation. Right now for the taxpayer in Wisconsin, he or she is paying taxes for using the phone line to get on the Internet and then for using the Internet services. You can be sure that there are a lot of angry America Online users out there in Wisconsin. Many in the state legislature feel that instead of taxing the Internet, there should be ways to develop this business in the state by encouraging businesses to come in and set up shop instead of scaring them off, which this tax is doing right now.