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US Internet Tax Moratorium Extension Goes To Wire

by Mike Godfrey, Tax-News.com, Washington
Friday, September 12, 2014

Broadband for America (BfA) and the ITFA Coalition have issued statements urging the United States Congress to make permanent the Internet Tax Freedom Act (ITFA), which bars state taxes on internet access and use, before it expires on November 1.

BfA is a coalition whose members include consumer advocacy groups, content and application providers, and internet infrastructure providers. One of its two honorary co-Chairmen, former Republican Senator from New Hampshire John Sununu, was lead sponsor of a bill to make the original ITFA permanent in 2007.

On September 9, Sununu and BfA's other honorary co-Chairman, former Republican Representative from Tennessee, Harold Ford, Jr., stated: "With only a few legislative working days remaining before lawmakers depart to campaign ahead of the November election, Congress must permanently extend the ITFA to prevent unnecessary and detrimental taxes from being inflicted on the American people."

"The House of Representatives passed a permanent extension of the Internet Tax Freedom Act, and it is now time for the Senate to follow suit," they said. "Impeding the extension's passage would endanger affordable access to the internet for millions of Americans."

On the same day, the ITFA Coalition, a partnership of businesses, associations, and consumers dedicated to the Act's permanent extension, also urged the Senate to follow the House by passing an ITFA extension.

The Coalition pointed out that, "with just eight legislative days remaining before the ITFA expires, now is the time to act to ensure students, small businesses, working families, and other internet users are protected from new taxes on internet access. Ö Congress needs to ensure that millions of Americans who use the internet daily to look for jobs, participate in online courses, communicate with family members, or access government services will not be subject to new financial burdens."

It noted that, "according to a recent study by the Center on Budget and Policy Priorities, the total new tax burden placed on consumers would be, at least, in excess of USD7bn. The implications, should the Senate not act, seem clear: additional financial burdens will be placed on all Americans, which include those who can likely afford it least."

Originally passed in 1998 and extended three times since with broad bipartisan support, the ITFA's future depends on bills presently in the House and the Senate, which, too, have enjoyed broad bipartisan co-sponsorship.

However, the prospect of a "clean" permanent ITFA extension being passed in the Senate was complicated prior to the summer recess by certain lawmakers in the Senate, including its Majority Leader, Harry Reid (D – Nevada), who looked to link it to the more controversial Marketplace Fairness Act (MFA). The MFA, which would allow states to impose sales taxes on online purchases, is currently stuck in the House Judiciary Committee.

It is therefore now expected that Reid will shortly introduce a bill in the Senate that would only provide for a short-term ITFA extension – possibly until end-December – to allow more time for the possible combination of the MFA with a longer-term extension to ITFA.



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