It won’t be Gov. John Kasich’s problem. But his successor and a future Ohio legislature may have to cut state spending or raise another tax in 2020, since Congress banned taxing businesses for Internet services.
The provision, part of an unrelated bill expected to be signed by President Barack Obama, permanently bans states from taxing businesses for their Internet access. Ohio businesses pay the tax to their Internet service providers, which turn it over to the state, and to providers of online information services such as credit and employment-background checks.
In 2014, the tax brought in about $65 million for Ohio, with $12 million of it turned over to local communities, according to Tax Analysts, a publisher of tax news and analysis.
Ohio is one of seven states taxing Internet access, and it exempts individuals and households. Critics in the technology sector say these taxes are unfair — they amount to a tax on information and communication — and many in Congress agree. In fact, Congress passed a number of temporary bills since 1998 to ban Internet-access taxes, but the bills always carved out exceptions for the seven states already collecting the tax.
That will end in June 2020. The Senate last week, following House action, passed a bill concerning customs and border protection and threw in a permanent ban on Internet-access taxes. States now collecting the taxes — Ohio, Hawaii, New Mexico, North Dakota, South Dakota, Texas and Wisconsin — must stop doing so in June 2020. U.S. Sen. Ron Wyden, an Oregon Democrat who got the measure put in the customs bill, called this “a big win for American consumers and businesses.”
Click here to read more of this story.
About Marion Online News
