The Internet tax moratorium is set to expire on Wednesday, December 16, 2015. Instead of Congress temporarily extending the moratorium as it has done several times in the past two years, the Senate should pass the Permanent Internet Tax Forever Act, which would permanently ban state and local taxes on Internet access. (See here, here, and here.) The House already passed its version of the bill back in June 2015. (See my June 2015 blog for more.)
Michael Powell, President and CEO of the National Cable and Telecommunications Association, Meredith Attwell Baker, President and CEO of CTIA - The Wireless Association, and Walter B. McCormick Jr., President and CEO of U.S. Telecom Association, sent a coalition letter to members of the Senate, urging them to support a permanent extension on the Internet Tax Freedom Act. The letter also discusses the important bipartisan history of this issue:
Over the nearly 17 years since ITFA was enacted, the Internet has become an engine for economic growth, opportunity, and inclusion while American consumers have been shielded from having their broadband access subject to the myriad of discriminatory taxes and fees that apply to traditional telecommunications services, often at rates twice that of general sales taxes—11.5% on average but as high as 17% in some places. Because of this bipartisan policy achievement, most Americans have never paid these taxes on their broadband access.
This success – begun during the Clinton Administration, and continued through the Bush Administration and thus far through the Obama Administration – is at risk because ITFA will expire this year unless Congress acts. Expiration would likely increase the cost of broadband access as it would become vulnerable to new onerous telecommunication taxes and fees, an imminent threat due to the Federal Communications Commission’s recent reclassification of broadband services as a Title II telecommunications service. At a time when promoting broadband adoption is a national priority, Congress should ensure that every American can afford to participate in the digital economy by making the expiring ban on Internet access taxation permanent.
As stated in the letter by these industry leaders, permanently banning taxes on Internet access would help keep the Internet affordable for all Americans and would lead to additional market-driven innovation, content choices, and economic growth.The Senate should act immediately to adopt the permanent ban on state and local taxes for Internet access!