Baltimore Sues Vonage For Phone Tax

The city is suing Internet phone service provide Vonage to collect a telephone excise tax, although Vonage claims it does not have to pay the levy. In 2004, Baltimore, as part of a deficit reduction plan, imposed a $3.50 monthly tax on phone lines. The city says in the lawsuit that the tax also applies to Internet-base phone service offered by Vonage and others.

"The service that Vonage is providing clearly fits the definition of a telecommunications line," said Joshua N. Auerbach, an assistant solicitor.

A telecommunications line is defined as a wired or wireless connection, identifiable by a unique telephone number, to an exchange, wireless or other telecommunications service, according to Baltimore's city code. New Jersey-based Vonage has argued that it offers an information service, not a telecommunications service, according to the suit.

But Vonage, which is based in New Jersey, says it offers not a telecommunications service, but an information service.

Brooke Schulz, a spokeswoman for Vonage, said the company will fight the lawsuit, which seeks back taxes, interest and a 10 percent penalty payment.

Auerbach said it is not known how many customers Vonage has in Baltimore.

In July, Maryland's Tax Court ruled that Baltimore and Montgomery County did not overstep their authority by imposing telecommunication taxes.

Source: WTOP

Tech Topics