Six Months Away, Six Reasons Why Congress Must Stop Internet Access Taxes

Michi Iljazi

May 1, 2014

Today marks a very important moment for Internet access fees. Six months from now, the moratorium on Internet access taxes will expire. The Taxpayers Protection Alliance (TPA) recently signed onto a bipartisan letter sent to members of Congress asking them make the moratorium on Internet access taxes permanent before the ban expires in November.

According to the letter sent last month:

While the Internet was a nascent technology when the current moratorium was established in 1998, it has become the economic engine driving innovation and growth in our 21st century economy. Throttling that engine at a time when our economy is struggling hurts not only those trying to invest in America’s future, but also those who can least afford it and have the most to gain from the Internet’s potential… By establishing tax policies that will help keep access to the Internet affordable and Internet commerce free from multiple and discriminatory taxation, more and more citizens of all economic levels will be able to participate in today’s digital economy.

Congress has the power to act, and here are six reasons why, six months out it is important that Internet access remain tax-free:

1.  Internet Access Taxes Will Harm Middle Class Families

“According to the US Census Bureau, in 1997, 18% of US households had an Internet connection.  Yet, by 2012, just 15 years later, 74.8% of all US households enjoyed an Internet connection.”

2.  Internet Access Will Harm Education, Innovation, & Commerce

The impact of the Internet is evident in the scope of its use to help workers look for new job opportunities, to provide students access to educational materials and classes from around the globe, to break down geographic barriers to provide small businesses and entrepreneurs entrance to new markets regardless of their location, and to enable consumers access to information and entertainment anywhere, anytime.”

3.  Preventing Internet Access Taxes Has Bipartisan Support in Congress

In 2013, TPA was excited to see the bipartisan Permanent Internet Tax Freedom Forever Act introduced in the House by Judiciary Chair Rep. Bob Goodlatte (R-Va.) and Rep. Anna Eshoo (D – Calif.), Rep. Spencer Bachus (R-Ala.), Rep. Steve Cohen (D-Tenn.) and Rep. Steve Chabot (R-Ohio); and the introduction of the bipartisan Senate version, Internet Tax Freedom Forever Act, from Sens. John Thune (R-S.D.) and Ron Wyden (D-Ore.).

4. Fifteen Years Have Passed Since The Internet Tax Freedom Act (ITFA)-

“When the Internet Tax Freedom Act (ITFA) was first enacted, the opportunity presented by the Internet was just beginning to show its promise. However, during the fifteen years since ITFA first instituted a moratorium on the taxation of Internet access, the Internet has become the engine of our 21st century global economy.”

5.  Congress Keeps Renewing the Moratorium, Time to Make it Permanent-

“The original ITFA expired in 2001 and was renewed in 2001, 2004, and 2007 with the most recent legislation set to expire in 2014.

6.  Internet Access Taxes Make a Complicated Tax Code Even More Complicated-

“Over 10,000 different state and local taxing jurisdictions across the nation tax communications services.  ITFA keeps this excessive tax burden from being expanded to Internet access.”

These are just six of the many reasons why Congress needs to act swiftly in order to make the moratorium on Internet access taxes permanent and TPA will continue to highlight all of them as we near the deadline for the expiration on the ban. There is no doubt how important the Internet has become in the daily lives of taxpayers, consumers, and businesses all across the country so it is important to ensure that any chance for a tax increase is stopped well before it has the chance to occur.