Today Chairman of House Judiciary Committee Rep. Bob Goodlatte (R-Va.) and Rep. Anna Eshoo (D – Calif.) introduced the Permanent Internet Tax Freedom Act (PITFA) along with Rep. Spencer Bachus (R-Ala.), Rep. Steve Cohen (D-Tenn.) and Rep. Steve Chabot (R-Ohio). PITFA permanently bans taxes on Internet access, and bars multiple and discriminatory taxes on electronic commerce.
The current law banning state taxes on Internet access and discriminatory taxes on electronic commerce was first enacted on a temporary basis in 1997 and has been reauthorized three times. That law currently know as the Internet Tax Moratorium is scheduled to expire in November 2014. PITFA would make the Internet Tax Moratorium, which bans taxes on Internet access and bans discriminatory taxes on e-commerce, permanent with one important change.
The original iteration of the law grandfathered in preexisting Internet taxes with the intent of a gradual phase out. Because PITFA eliminates the grandfathered Internet connection taxes, many Americans will see their broadband service bills decrease.
PITFA would also ensure the continued growth of online commerce by forever barring states from taxing online purchases at a higher rate than the general sales tax rate.
The companion Senate version of PIFTA, the Internet Tax Freedom Forever Act, was introduced shortly before the August recess by Sen.John Thune (R-S.D.) and Sen. Ron Wyden (D-Ore.).