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Telecom could enter U.S. tax debate

With little more than a week left to file year 2000 federal tax returns, many in Congress are trying to make next year's tax bill a little easier for telecommunications companies to digest.

WASHINGTON--With little more than a week left to file year 2000 federal tax returns in the United States, many in Congress are trying to make next year's tax bill a little easier to digest for telecommunications companies.

The Bush administration is quietly telling business interests not to try to attach corporate tax cuts to his $1.98 trillion tax cut, which just passed the House. But a number of bills have been introduced recently that--while providing telecom corporations with tax cuts and credits--are designed for the public benefit, not to enrich corporations, according to their sponsors.

Heading that list in popularity is encouraging the spread of broadband Internet access to rural and underserved areas. Another issue that is popular again this Congress is removing the 3 percent excise tax from consumer telephone bills. Others seek to do everything from boost technology in the classroom to enable more telecommuting, all through tax incentives.

While all the bills so far are standing alone, ideally their sponsors would get them attached to Bush's massive tax cut bill.

"It's a lot easier to get your bill passed when it's part of a much larger package," said Rep. Jerry Weller, R-Ill., at a recent technology gathering on Capitol Hill. Weller is one of many planning tax bills.

Broadband has the momentum
Of all the tax-related telecom bills introduced this Congress, the one with the most visible support in and out of Congress is the plan to expand tax credits for broadband providers that offer service in rural areas. The House bill introduced by Rep. Phil English, R-Pa., has 137 co-sponsors, while the Senate version by Sen. Jay Rockefeller, D-W.Va., has 50 co-sponsors, half of the Senate.

There are numerous bills out there to expand broadband, including one that passed the House floor recently to reduce regulations on rural phone companies as an incentive for them to offer service. House Commerce Committee Chairman Billy Tauzin, R-La., and top committee Democrat John Dingell of Michigan are expected next week to bring back a bill from the previous Congress that allows Bell companies to send data long distance.

But support among industry lobbying groups in Washington seems to be unifying around the tax credit bill. The Rockefeller-English bills are supported by groups such as the Information Technology Industry Council (ITI), TIA and the American ISP Association.

"The Rockefeller bill is where our focus is," ITI President Rhett Dawson said, citing its balanced approach and technology-neutral benefits.

Another bill with momentum is one to eliminate the 3 percent telephone excise tax, which opponents say dates back to the Spanish-American War. Last year, the House voted to kill the tax by a margin of 420-2, but President Clinton vetoed the bill.

Rep. Robert Portman, R-Ohio, who sits on the House Ways and Means Committee, is again attempting to kill the tax, with the strong support of the House Republican leadership.

"This tax is anti-telecommunications and anti-Internet at a time when we're trying to lower telecommunications costs and expand Internet access for all Americans," Portman said in a statement. "Ninety-six percent of American households that use the Internet log on through telephone lines."

Other bills of interest:

• Last week, two bills were introduced that would guarantee the inclusion of any wireless device as a depreciation for businesses.

• Rep. Frank Wolf, R-Va., a longtime supporter of remote working, has introduced a bill to allow telecommuters to get a tax credit of up to $500 annually on any telecommuting-related expenses.

• In an effort to boost technology education, Rep. Ken Lucas, D-Ky., introduced a bill recently to give teachers tax credits of up to $1,000 annually on any expenses they incur for technology while teaching. The bill also would provide better tax credits for computer donations to schools and libraries.

• Weller has promised to introduce a bill that would change the depreciation schedule on telecommunications and computer equipment from five years to as little as two. It's not clear when that bill might be introduced.