Congress Weighs Tax on VoIP and PBX-Enabled Enterprise Networks

Under the current law, the PBX systems bought or leased by enterprises for local and long-distance internal communications are viewed as "private communications systems" and are not subject to the tax. But the Joint Committee says this exclusion makes no sense today, when enterprises have the option to use VoIP to facilitate local and long distance calls, while smaller users must pay the excise tax.

The Joint Committee is right about one thing: The tax makes no sense. But it should be repealed, not modified. Extending the tax to enterprises will inhibit the adoption of VoIP and other broadband technologies, and it could retard development of digital convergence just as it begins to emerge.