Senators Move to Make Internet Tax Ban Permanent

Internet Tax Freedom Forever Act would permanently ban Internet taxation

Sens. Ron Wyden, D-Ore., top Democrat on the Senate Finance Committee, and John Thune, R-S.D., chairman of the Commerce, Science and Transportation Committee and member of the tax-writing Senate Finance Committee, reintroduced Tuesday the bipartisan Internet Tax Freedom Forever Act.

The U.S. House of Representatives passed a companion measure by voice vote in the last Congress.

The original Internet Tax Freedom Act, which Wyden co-authored in 1998, put in place a moratorium preventing state and local jurisdictions from imposing new taxes on the Internet and multiple and discriminatory taxes on e-commerce. While Congress has reauthorized the law five times since its enactment, the Thune-Wyden bill would make the moratorium permanent.

“I co-wrote the Internet Tax Freedom Act to protect the openness and viability of the Internet as a platform for commerce, speech and the exchange of ideas,” said Wyden, in a statement.

Without ITFA, Wyden said, “access to information would no longer be tax-free. Access to online communication would no longer be tax-free. Access to the global marketplace so crucial to America’s economic future would no longer be tax-free. The cost to consumers could easily be hundreds of dollars a year per household. Now is the time to make this law permanent.

Thune added in the statement that the Internet is the “lifeblood for successful 21st century innovators and entrepreneurs,” so “we should be celebrating their success, not taxing the tools they use to achieve it.”

The bill would permanently ban Internet taxation and would encourage “more American innovators and entrepreneurs to use broadband to develop the next big thing, while keeping the Internet open and accessible to consumers across the country,” Thune said.

Thune said he and Wyden “look forward to working with [Senate Majority Leader Mitch] McConnell to bring this bill to the Senate floor.”         

Thune and Wyden’s Internet Tax Freedom Forever Act is supported by 38 other senators.

ITFA will remain in effect until Oct. 1 unless it is renewed or replaced.

--- Check out Bills on 529 Plans, Small Biz Taxes Head for House Vote on ThinkAdvisor.

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