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Kanavas rips Doyle for “taxing Internet”

Brookfield, Wis. - State Senator Ted Kanavas, R-Brookfield, continues to maintain that Gov. Jim Doyle is defying a federal law to suspend taxation on Internet access, but a spokeswoman in the state Department of Revenue said the state is in compliance with the law.

Kanavas said Doyle has ignored a federal law, known as the Internet Nondiscrimination Act of 2004. According to Kanavas, the law is designed to protect Internet users from being taxed for “simply logging onto the Internet,” and gave Wisconsin until Nov. 1, 2006, to suspend taxation of Internet access.

Audra Brennan, executive assistant to Michael L. Morgan, secretary of the Department of Revenue, said the tax has not been suspended because Wisconsin is one of the states that is grandfathered out of the Internet Nondiscrimination Act.

Kanavas, however, said that is in dispute, and that Doyle defiantly continues to collect nearly $30 million dollars in taxes from everyday Internet users and businesses. At the time the bill was passed, Kanavas said only eight other states taxed Internet users, indicating low support for what he called a scheme that would inhibit small business and economic growth.

He said Doyle can stop collecting the tax, but refuses to do so. “They are collecting the tax, and it's hurting the technology industry and it's hurting Wisconsin,” Kanavas said. “You can't be in the position of trying to incent something and also be taxing it.”
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Brennan said the federal legislation contains a grandfather clause for states that already had a law in place to tax Internet access. She said the clause applies to states that enacted the tax before Oct. 1, 1991, and Wisconsin's Internet access tax was enacted on Aug. 8, 1991. That was during the administration of former Gov. Tommy Thompson, a Republican.

Attempts to contact Governor' Doyle's office were unsuccessful.

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