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Letter to the Honorable Lamar Alexander 1 (November 2003)

handle is hein.congrec/cbo9453 and id is 1 raw text is: November 5, 2003

Honorable Lamar Alexander
United States Senate
Washington, DC 20510
Dear Senator:
This letter responds to the three questions you posed in your letter of
November 4, 2003, regarding S. 150, the Internet Tax Nondiscrimination Act.
1. How much revenue is being collected by state and local governments
from taxes on DSL?
CBO estimates that state and local governments currently collect at least
$40 million per year in taxes on DSL service (Digital Subscriber Line-a high-
speed data transmission over regular telephone wires). They are likely to
collect revenues totaling more than $80 million per year by 2008 due to
growth in the use of high-speed Internet access. These collections are
primarily sales and use taxes on DSL service.
2. What would be the revenue loss to state and local governments under
the managers' amendment to S. 150?
Based on the version of the proposed amendment CBO received late this
afternoon (S150MGR.6), CBO has determined that the bill would create
intergovernmental mandates as defined in the Unfunded Mandates Reform
Act. We estimate that those mandates would impose costs on state and local
governments in at least one of the next five years that would exceed the
threshold established in that act ($60 million in 2004, increasing to $66 million
in 2008). We have identified three major impacts, each of which would, by
itself, exceed the threshold:

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