The House Judiciary Committee has approved legislation by a wide margin that would prohibit states from taxing Internet access.

The committee approved H.R. 3086, the Permanent Internet Tax Freedom Act, by a vote of 30 to 4 on Wednesday. The bipartisan bill has more than 220 cosponsors. The legislation would make permanent the provisions of the Internet Tax Freedom Act, which temporarily bans states from taxing Internet access or placing multiple or discriminatory taxes on e-commerce. Most states currently do not tax Internet access, although several do, including Ohio and Texas, which were grandfathered under the original legislation. The new bill would remove that exemption.

ITFA was first enacted in 1998 and has been extended three times with overwhelming bipartisan support. Only two “no” votes were ever cast in the history of these extensions, according to House Judiciary Committee Chairman Bob Goodlatte, R- Va., who sponsored the new bill. The most recent extension expires on Nov. 1, 2014.

By striking the 2014 expiration date from the bill, the Permanent Internet Tax Freedom Act makes the moratorium permanent instead of requiring reauthorization every few years.

Goodlatte praised the committee vote Wednesday. “Today’s Internet connects communities in the Sixth District with people throughout the United States and across the globe,” he said in a statement.

“Many folks rely on access to the Internet to continue educational opportunities, apply for employment, run businesses, monitor banking accounts, and communicate with family and friends. This tool has transformed our economy and how we live our lives each day. The Permanent Internet Tax Freedom Act passed by the committee today permanently bans taxes on Internet access. The last thing people need is the puzzling array of taxes on their phone bills to be repeated on their Internet service bills. Instead of applying a Band-Aid every few years to further extend the tax ban, PITFA would provide a permanent fix. This broadly bipartisan bill ensures that access to the Internet is not burdened by unnecessary costs and that Americans can continue to access the Internet tax free.”

The committee rejected an amendment from Rep. John Conyers, D-Mich., that would have extended the prohibition on Internet access taxes for only four years and permitted the states that were grandfathered under the original legislation to continue to tax Internet access.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access