Telecommunications evolution and inequities of current tax policies: A case analysis for New Jersey

Telecommunications technologies, services and regulatory policies have been on a rapid spiral of evolution in recent years. However, state policies on taxation of telecommunications services and service providers and the systems of compensation of local governments for the use of public resources by cable television and telecommunications companies, have not kept pace with this rapid change. This paper examines the case of the State of New Jersey. It provides a baseline profile of revenues, taxes and user fees of telecommunications service providers for 1999 through 2005. The paper illustrates the effect of convergence and discusses the need for updating tax policies.