The Permanent Internet Tax Freedom Act [PITFA], introduced in the House of Representatives on Friday, would make permanent a moratorium on Internet access taxes in place in the U.S. since 1998. Late last year, Congress extended the moratorium until Oct. 1.
Congress has temporarily extended the Internet access tax moratorium five times in the last 16 years, but sponsors argue it's time to make the ban permanent. Without an extension, U.S. residents could face a substantial increase in the cost of Internet access, with some states likely to levy taxes of 10 percent or more, sponsors said.
"Whether business owners or job seekers, grandparents or students, all Americans benefit from tax-free access to the Internet," Representative Bob Goodlatte, a Virginia Republican and primary sponsor of the bill, said in a statement. "Internet access drives innovation and the success of our economy. It is a gateway to knowledge, opportunity, and the rest of the globe."
Some House Democrats objected last year when lawmakers pushed for a permanent ban on access taxes that would have also eliminated a grandfather clause that allows seven states, including Texas and Ohio, to collect taxes on Internet access. The grandfather clause applies to states that had access taxes in place before Congress passed the first tax moratorium in 1998.
The new bill would not eliminate the grandfather clause for those seven states.
A permanent tax ban is "the next crucial step" for promoting access to broadband and protecting the growth of the U.S. digital economy, Representative Anna Eshoo, a California Democrat and bill co-sponsor, said in a statement. "Passage of this bill would ensure that millions of consumers will not be burdened with an increase to their monthly Internet bills due to new state and local access taxes."
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's email address is grant_gross@idg.com.