Three federal lawmakers want to ban taxes on Internet access, taxes by two states or more on Internet purchases, and any tax treating online buying differently than brick-and-mortar buying.
"It's important that we take a stand right here and now,” said one of the new bill’s sponsors, U.S. Sen. George Allen (R-Virginia), on April 19, “to make sure that we say that the United States of America and the Internet will be a no-tax zone, now and forever."
The bill would all but make permanent an ongoing federal moratorium on Internet taxation but it would not address Voice over Internet Protocol (VoIP), which Allen said would likely be addressed in separate legislation. And it won’t remove an existing grandfather clause that allows some current state Net taxes to expire this year and others to expire in two years.
A move last year to ban Net taxes was throttled when some senators stalled the bill over concerns that it would stop states from taxing VoIP, leading to a compromise extension of the Net-tax moratorium.
Sen. Ron Wyden (D-Oregon) co-sponsors the new bill, saying as do other tax-ban supporters that Internet taxation would slow both adoption of broadband and the U.S. economy as a whole. Rep. Christopher Cox (R-California) is the bill’s third co-sponsor.
"The Internet Tax Freedom law has created a level playing field, stopping unfair and discriminatory tax schemes that would wall off the Internet to many consumers and make e-commerce impossible for online business owners," said Wyden in a formal statement. "Internet users and entrepreneurs who breathed a sigh of relief at this law's extension should have the security of knowing its protections will never go away."
Cox has also tried making the Net-tax moratorium permanent on five previous occasions. “This is one of America's most popular consumer-protection laws," he told a Washington press conference when the new bill was introduced. "It's time to make it permanent.”
“I want to protect American consumers from government tax commissars who see anything successful as a tax target,” said Allen, who has also introduced a bill to stop Congress from extending, yet again, a 3 percent federal excise tax on telecommunications to Internet traffic—a tax originally born to help finance the Spanish-American War.
