Armstrong Internet Equipment (A.I.E.) announced its plans to invest $5.5 million in an Internet equipment manufacturing plant in Georgia.The move is the latest in a string of announcements that have been made by the Georgia-based electronics manufacturer, which employs more than 7,000 people.The announcement is a further sign of the company's intentions to expand in the U.S.A.E. announced its inve...
A taxpayer who can’t use a tax credit to pay an internet-connected home appliance could face an income tax bill if they want to replace their old equipment.
In 2018, the Taxpayers Protection Alliance (TPPA) filed a lawsuit in federal court in the Northern District of California, asking a judge to rule that the taxpayer cannot claim an internet infrastructure expense deduction because their tax credit does not allow them to use an internet connection to replace a wired internet connection that they paid for with a service charge.
Under the federal Taxpayer Protection Act, taxpayers who pay taxes on the value of a home, business or investment property must deduct the cost of all telecommunications, electrical and other equipment and supplies that they purchased, repaired or used for the purpose of providing telecommunications service.
The TPA, however, does not permit taxpayers to deduct an internet equipment or internet service expense if the taxpayer used a service to provide the service, such as the Internet or satellite.
If a taxpayer can’t claim an Internet equipment or Internet service expense for an internet home appliance, the taxpayer would be responsible for paying the actual cost of the equipment or service.
In the case of an internet router, the deductible item would be the cost to the taxpayer of the wire to connect to the internet.
In other words, the internet connection costs the taxpayer the money.
The taxpayers group, however and the TPA are arguing that the deduction does not apply to the taxpayers Internet equipment and internet service.
“The deduction is a reasonable, neutral, and not punitive tax deduction for internet expenses, such that the tax benefit of the deduction is not increased by more than $2,000,” TPA attorney Jeffrey Kowalczyk wrote in an email to The Associated Press.
The IRS declined to comment on the lawsuit.