If passed by the Minnesota legislature, the Broadband Tax bill currently being considered at the Capitol in St Paul would authorize local governments to add a new local tax to the monthly bills that consumers pay.
That measure could increase the cost of internet and internet-enabled services by up to 8%.
“This would increase costs and add a tax onto anything that is a broadband or internet enabled service; that’s anything delivered over your Internet connection like a home security network, on-demand video. It could be a stacked tax on multiple services,” explained Melissa Wolf, executive director of the Minnesota Cable Communications Association, which opposes the bill.
While sometimes called the “Equal Access to Broadband Act,” Wolf said the reverse is actually true; she called the proposal for new taxes regressive. She said the higher costs will fall heaviest on families who are already struggling and may make internet services unaffordable for them.
“It’s really baffling. This tax will hit every Minnesota family but it will hit the lowest income families the hardest,” she said. “Some of them will have to choose between possibly having internet at home and buying groceries each month.”
Wolf added that the tax threatens to expand the so-called digital divide.
That’s the gap that was fully exposed during COVID-19 lockdown, when an estimated 27% of Minnesotans entered the pandemic without any home broadband connection.
Households without reliable internet connections suffered a disproportionate impact. The lack of access to the essential digital lifeline took its toll, from children who could not log on to learn to adults who could not work from home or seek online telehealth appointments.
“We know that internet access is critical in providing equitable outcomes,” said Wolf.
State lawmakers are debating higher local broadband taxes at the same time the Affordable Connectivity Program (ACP), a federal program, is about to run out of money.
In Minnesota, 245,000 low-income families enrolled in the ACP program have gotten monthly subsidies to cover their high-speed internet costs. Congress has not authorized continuing the program, so many will have to make up the $30 monthly difference from their own pockets.
Wolf urges consumers who oppose the new tax to reach out to their state legislators or the governor with a phone call, letter or e mail. They can also go to the website nointernettaxmn.com to state their objections.