The Senate has included a permanent ban on taxes for Internet service within a larger trade enforcement bill that was passed Thursday.
The bill also included a prohibition on charging extra taxes for buying goods and services online rather than in a physical store.
Sen. Ron Wyden, D-Ore., praised the inclusion of the Permanent Internet Tax Freedom Act within the larger trade enforcement legislation, known as the Trade Facilitation and Trade Enforcement Act of 2015. He co-authored the original Internet Tax Freedom Act in 1998 with former Congressman Chris Cox, R-Calif.
The law has since been extended 11 times to extend the ban, but the new bill would permanently ban taxes on Internet access. The Senate approved the permanent ban by a 75-20 vote. The legislation has already been approved in the House and will head to President Obama’s desk for his signature. He is expected to sign it into law.
“Right now most Americans pay $0 in taxes to connect to the Internet,” Wyden wrote in a
Sen. Chuck Grassley, R-Iowa, has also long been an original co-sponsor of legislation to permanently bar state and local governments from taxing access to the Internet. “Most people agree that Internet access is something we want to encourage,” he said in a statement. “Whether we use online access for work, education or recreation, we want the access, period. The more affordable Internet service is, the more people who will be able to get online. Making the state and local tax ban permanent is good news for consumers. It sends the message that a resource like the Internet ought to be available as widely as possible, and that taxes shouldn’t be a barrier.”
Proponents of legislation to standardize sales taxes for online purchases are still hoping to get their bill passed. The Senate passed the Marketplace Fairness Act in 2013, but it was never taken up in the House under former Speaker of the House John Boehner, R-Ohio. A retail industry group is pushing the current Congress, now led by House Speaker Paul Ryan, R-Wis., and Senate Majority Leader Mitch McConnell, R-Ken., to revive the bill.
“Leader McConnell’s commitment to work with Senate advocates of e-Fairness legislation and schedule a vote this year is a welcome sign for advocates of a level playing field,” Retail Industry Leaders Association executive vice president of government affairs Jennifer Safavian said in a statement Thursday following passage of the legislation banning taxes on Internet access. “Retailers want a true free market and a tax code that treats all businesses equally. Given the exponential growth of online and mobile retail, it makes no sense to continue subsidizing online-only sellers with special tax treatment. Every retailer should be given the opportunity to compete for customers on price, selection, convenience and customer service--government tax policy should not be picking winners and losers. We urge Speaker Ryan to make a similar commitment to allow his colleagues in the House to vote on legislation closing the online sales tax loophole by the end of this year."
