a. Provide federal and state tax credits to encourage teleworking. A home office requires a substantial expenditure of money for hardware, software and broadband access by a home-based business owner, a telecommuter and/or the telecommuter’s employer. The recent $4,000 Cash for Clunkers program shows tax credits can be a very effective stimulus, and the current $8,000 first time home buyers tax credit is helping to pull the housing industry out of a steep decline. If we can provide Cash for Clunkers and dough for dwellings, why not a similar effort to encourage teleworking? The federal government currently provides a $2,000 federal tax credit for hybrid vehicles purchases. An important justification for the tax credit is that hybrid vehicles greatly reduce air pollution, especially that caused by commuters and rush hour traffic jams. Because it would achieve an even better outcome (no vehicular air pollution from cars in the driveway and less air pollution because of fewer/shorter traffic jams), AHGA recommends a similar $2,000 tax credit for technology expenses used in teleworking (hardware, software, broadband access, cell phones, etc). Whoever paid for the products/services (telehome business owner, telecommuter, and/or his/her employer), would be eligible for the tax credits.

b. To stimulate telehome businesses, help the environment, and reduce state and local transportation infrastructure costs, Congress should prohibit state sales taxes on Internet transactions. State and local governments exempt consumers from sales taxes for a variety of economic activities anyway (sales of prescription drugs and tax holidays on back to school expenses, etc.). An Internet commerce sales tax exemption is equally deserving. It would encourage Internet commerce, substantially reducing automotive pollution since the products will be delivered by the US postal carriers, and FedEx/UPS trucks that go up and down their streets anyway. It would reduce state and local government costs of maintaining and expanding transportation infrastructure. Such a policy is strongly supported by voters. Last year, Parade Magazine asked its readers “Should You Pay Sales Tax on Internet Shopping?” Based on 3,125 responses, 85% opposed taxing Internet sales.

c. Reform depreciation laws affecting technology products. Technology products (computers, peripherals cell phones, etc.) become outdated very quickly. To encourage employers/telehome businesses to maintain technological competitiveness, their depreciable lifespan should be reduced to 2 years. Recordkeeping should also be simplified and liberalized for home offices, and limited personal use of computers, Internet access services, cell phones, etc., should be exempt from taxable liability.

d. Since broadband access is essential to teleworking, the $7 billion+ in stimulus funds allocated for expanding service to the unserved and underserved should be focused on the unserved. Further, it should focus on those unserved areas which will not soon be served by other private/public sector broadband deployments already in process or planning over the next few years. This will maximize the number of additional homes that can receive broadband as a result of the effort.

e. Adoption rates are important. Not all unserved rural communities are alike. Some remain essentially farming communities with shrinking populations of older residents, mostly farmers. Others are growing, have more new, younger, and technologically oriented residents whose demographics more closely reflect suburban populations. Such communities with a high percentage of “ruburbian” residents (rural residents with urban/suburban demographic characteristics) exist across the country and are good candidates for broadband deployment from an ROI standpoint.