VOIP: "If it moves, tax it"

"Over the course of the next year, VoIP and other Internet content providers will face an increasing number of tax questions. Although the protections of the Internet Tax Freedom Act were extended - IP voice was excluded from the scope of the new legislation. Although Senator Sununu and Congressman Pickering introduced versions of the 'VOIP Regulatory Freedom Act of 2004' the legislation has not yet been reintroduced. Under these reasonable proposals, VoIP would have been exempt from a patchwork of multiple and discriminatory state regulations; the bill would have also preempted the states from imposing upon VoIP applications various geographic tax burdens.

While it's unclear what 2005 holds for VoIP, President Ronald Reagan's thoughts on government generally can provide some foresight on the upcoming legislative and regulatory debate. When asked whether the government's view of the economy could be summed up in a few short phrases, Regan responded: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it. Whatever direction telecommunications reform takes in 2005 - taxation, regulation and subsidies will clearly be at the top of the policy agenda for VoIP."

From this Swidler Berlin LLP article from Mondaq.