Advocates For Consumer Rights

Hawaii On Verge of Phasing Out Internet Access Tax


NOTE: After the following interview, AFCR Communications Director Scott Foster said, “The original effort to end the rapacious Internet access tax was initiated in Hawaii by our tiny organization. Because we could not move our state legislature to cease collecting this tax — $20M annually in Hawaii — we joined forces to finally achieve this act of Congress. Our victory just goes to show what a small organization such as AFCR can accomplish by staying the course and doing the work. To know that this bill is now sitting on President Obama’s desk awaiting his promised signature is very gratifying.”

View the following on line video news story HERE 


February 11, 2016

Fox Network
Hawaii On Verge of Phasing Out Internet Access Tax

You might not have known it, but if you pay for Internet service, you’re also paying a tax.

But that is likely going away, thanks to Congress. On Thursday, lawmakers on Capitol Hill voted to permanently bar state and local governments from taxing access to the Internet.

If the approved bill becomes law, seven states, including Hawaii, would have to phase out their taxes by summer 2020.

The Center on Budget and Policy Priorities reports that Hawaii could lose nearly $20 million each year in tax revenue.

The state Department of Taxation was not able to confirm that number, but said it has another five years to see the delayed effect.

Meanwhile, consumer advocates say no one should have to pay a tax for the Internet.

“Anything that costs the consumer additional money to have access to the Internet, that I would fight tooth and nail,” said Scott Foster, Hawaii Advocates for Consumer Rights.

Since 1998, Congress has passed a series of bills temporarily prohibiting state and local governments from taxing online access, but states including Hawaii, have been able to do so.

“I wouldn’t expect any impact on the local providers of Internet, because this is a tax that comes on top of whatever they charge,” said David Hunter, a professor at the University of Hawaii at Manoa Shidler College of Business.

State Sen. Sam Slom, R, Hawaii Kai, Diamond Head, says he’s been opposed to the tax for years.

“Any tax that can be stopped, I’m in favor of,” Slom said.

Slom said he is more concerned about over-taxation of Hawaii’s residents, rather than making up the lost revenue.

“Would people be able to get their money back that they have already paid on this tax?” KHON2 asked.

“Probably not, like so many other things, but be grateful if you can stop the tax and not make it be any bigger,” Slom said.

President Barack Obama is expected to sign the bill.


Feb 12, 2016

Screen Shot 2016-02-18 at 12.20.14 PMHonolulu
Congress kills an internet tax that states such as Hawaii collect
By A. Kam Napier

Bipartisan support led to the passage Thursday of a permanent Internet Tax Freedom Act (ITFA) in the U.S. Senate, Yahoo Finance reports. The act would prohibit state and local governments from taxing Internet access and email services.
Hawaii is one of seven states, including New Mexico, North Dakota, Ohio, South Dakota, Texas and Wisconsin, which collect such taxes. Combined, these seven states pull in $563 million annually in taxes. These taxes will have to be eliminated by 2020 under the requirements of the ITFA. Congress has banned state and local taxes on Internet access and email services; Hawaii one of seven states affected.

The ITFA’s next stop is President Barack Obama’s desk, for his signature. ABC News reports the White House has said the president supports the act.