Grassley, Ltr opposing Inter Ta
City Manager's Office
City Hall
50 West 13th Street
Dubuque, Iowa 52001-4864
(563) 589-4110 office
(563) 589-4149 fax
ctymgr@cityofdubuque.org
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April 28, 2004
Via Email and US Mail
ch u ck -g ra ssl e y@grassley.senate.gov
Senator Charles Grassley
206 Federal Building
101 1 st Street S.E.
Cedar Rapids, IA 52401
Dear Senator Grassley,
I am writing to express our opposition to the Internet Tax-Non-Discrimination Act
(S.150) and our support for the Internet Access Tax Ban Extension and Improvement
Act, (S.2084) as a substitute bill.
It has been estimated that S.150 will result in the loss of $9 billion in telecommuni-
cations fees and taxes to state and local governments. As you know, the impact of last
year's State cut in funding to local governments was devastating to the City of Dubuque
as it resulted in a reduction of $1,195,425 in revenue or 3.54 percent of the general fund
operating expense. Any additional cuts in funding would likely mean increased fees for
existing services, reduction of services and expenses through the elimination of city
staff.
In contrast, S. 2084 is an equitable temporary solution to the difficult issue of how
telecommunications services will be taxed. This bill protects the consumer, the industry
and state and local governments, instead of favoring one over the other. It would allow
local governments to continue to levy existing taxes on telecommunications and rights-
of-way, thereby ensuring that local and state government taxing authority is not
compromised.
At the same time, the measure would preserve the ban on email or Internet access
taxes, as well as multiple and discriminatory taxes. The amendment would also
establish parity among all types of Internet platforms, whether telephone lines, cable
Sen"ee
People
Integrity
R"'pons;bility
Innovation
Teamwork
Senator Charles Grassley
April 28, 2004
Page 2
modems or DSL, which provides clear protections for consumers and tax guidance for
states and localities.
We urge you to oppose S. 150, and support S.2084 as a substitute bill.
Sincerely,
fl~~
Michael C. Van Milligen
City Manager
MCVM:cs
cc: Mayor and City Council Members
Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Dawn Lang, Budget Director
Bill Baum, Economic Development Director
Merrill Crawford, Cable Franchise Administrator