Today the House of Representatives passed legislation to forever abolish taxation of Internet access and abusive electronic commerce tax rates.  The Permanent Internet Tax Freedom Act (PITFA), H.R. 3086 provides a permanent ban to any duty on Internet access from state and federal governments and implements nondiscriminatory rates on e-commerce products and services.

In November, the Internet Tax Freedom Act , implemented in 1998, expires. This Act, which was created to prevent heavy tax burdens from federal and local governments and prohibit biased taxation of e-commerce, has been reauthorized three times. Passage of Permanent Internet Tax Freedom Act shows that the House is concerned about protecting constituents from money-hungry politicians.

The legislation now moves to the Senate. The Internet tax moratorium in the Senate has 50 co-sponsors, But some big government senators think the solution to this problem is another temporary extension, believing a future tax on Internet access could be a lucrative source of revenue.

Americans were not born yesterday.  Without a permanent ban, Americans will see greedy state governments taking advantage of an opportunity for new revenue and worse, an opportunity to dip into our digital lives. Further, they could also see prejudiced tax rates on e-commerce, which are set at an average sales tax rate of 17 percent, 12 percent on video services, and 7 percent on general sales tax.

The Internet has flourished because elected officials have largely kept the government out. The Senate now must pass the Internet tax moratorium to keep it that way.


Photo Credit: Steve Rhode