Freedom Line Blog

In a letter to Senate Majority Leader Mitch McConnell and Senate Minority Leader Harry Reid, the Center for Individual Freedom (“CFIF”) today joined a coalition of more than 40 other organizations representing tens of millions of consumers from across the nation to urge support of a permanent extension of the Internet Tax Freedom Act currently embedded in H.R. 644, the Trade Facilitation and Trade Enforcement Act.

“In the 17 years since Congress first passed a ban on Internet access taxes, the Internet has evolved from a luxury into a necessity of modern life. ITFA helped to spark this revolution,” the letter states.  “Without ITFA, it is likely that Internet services would be taxed at the high rates of tax imposed on traditional telecommunications services, which often are more than double the rate of tax imposed on other goods and services.”

The letter concludes by urging the U.S. Senate “to act swiftly and decisively to pass a permanent extension of ITFA.”

To read the letter in its entirety, click here (.pdf).

To read the coalition press release, click here.

When the clock strikes midnight tonight, the federal moratorium blocking states and localities from taxing Internet access and shackling electronic commerce with multiple and discriminatory taxes will expire.  Consumers beware.

Congress first passed the federal law banning state and local governments from taxing Internet access in 1998. Since then, the moratorium has been extended on a temporary basis five times – a move that, among other benefits, has helped keep access to the Internet affordable for citizens and families of all economic levels. 

With the current ban set to expire, however, a number of state and local governments are eager to impose new taxes on the Internet. According to a recent report by the American Action Forum, lifting the ban on Internet access taxes could cost consumers as much as $16.4 billion.

That’s why the Center for Individual Freedom yesterday joined an impressive coalition of national free-market organizations on a letter urging Congress to pass H.R. 644, a trade bill that contains language to finally make the Internet tax ban permanent, something for which we have been advocating for well over a decade. 

To be sure, few in Congress dispute the benefits of keeping the Internet tax ban in place.  Except for a handful of Members of Congress who continually work to hold the policy hostage to the completely separate issue of whether the federal government should give states and localities new powers to force out-of-state retailers to collect and remit sales taxes on their behalf, the ban on Internet access taxes probably would have been made permanent long ago.

Fortunately, the House of Representatives today passed H.R. 644 by a vote of 256-158.  It’s time for the Senate to end the political games and follow suit.