INTERNET BUSINESS NEWS-(C)1995-2020 M2 COMMUNICATIONS
While other Internet providers may continue charging their customers amounts similar to Texas sales taxes on Internet access, effective July 1, 2020, which is when Texas is prohibited from continuing to collect these taxes, Houston-based Internet provider Tachus LLC is passing along the savings to its growing customer base, the company said.
Savings are reflected in a reduction in Tachus customers' monthly bill starting July 1, when states including Texas, Hawaii, New Mexico, Ohio, South Dakota, and Wisconsin can no longer require Internet companies to collect a state tax for Internet access from their customers.
However, Internet companies are still free to add additional fees to keep their customers' bills at the same price point as when state taxes were mandated.
Tachus, the only 100% fiber broadband Internet provider in the Houston area that offers enterprise-grade gigabit connections for homes, has no such plans. Instead, the Internet provider wants its customers to see the benefit of the policy change.
At the Federal level, this sales tax change is decades in the making. In the late 1990s, sales taxes levied on Internet access became illegal under the provisions of the Internet Tax Freedom Act. This 1998 law was created to protect then-developing Internet technology, and it prohibited states from applying taxes on Internet access.
However, a subsequent grandfathering clause allowed states already taxing Internet access to continue to do so for a period of time. After multiple extensions of the clause, the Trade Facilitation and Trade Enforcement Act of 2015 finally mandated to these states, including Texas, a moratorium on these collections on June 30, 2020.
The rule change comes at a time when...