The House of Representatives on Tuesday passed a bill that permanently prohibits states and local governments from taxing Internet access.
Since 1998, Congress has been imposing temporary bans on local and state taxation of Internet taxes. H.R. 235 would make such a ban permanent.
“The American people deserve affordable access to the Internet and the Permanent Internet Tax Freedom Act will help prevent unreasonable cost increases that hurt consumers and slow job creation,” House Judiciary Committee Chairman Bob Goodlatte (R-Virginia) and four other lawmakers said.
The Permanent Internet Tax Freedom Act (PITFA) was passed by a voice vote. Michael Powell, president and CEO of the National Cable & Telecommunications Association (NCTA), urged the Senate to pass companion legislation.
Consumers already pay a combined rate of more than 17 percent in local, state and federal taxes on phone and other traditional communications services, according to Peter Davidson, Verizon’s senior vice president of federal government relations.
“Extending these same taxes to an $80 monthly wireless data plan would add an additional $14 a month to a consumer’s bill. Nobody wants to see these same onerous taxes extended to Internet access, especially if we care about increasing broadband adoption and helping people use the Internet more, not less,” Davidson wrote Tuesday in a blog. “House passage of H.R. 235 helps ensure that we can hold the line on state and local governments reaching even further into consumers’ pockets to tax Internet access on a wireline or mobile connection.”
Dan Crippen, executive director of the National Governors Association, said he was disappointed the House had taken up the legislation before discussing “the need to create parity between in-state and out-of-state retailers regarding the collection of state and local sales taxes.”
“Governors maintain that before any federal legislation regarding state tax legislation is passed, Congress should first address this disparity,” Crippen said. “States want to work with Congress to craft thoughtful structural change that will help bridge the gap between the physical economy of the 20th century and the digital economy of the 21st century.”