Keeping Internet access tax-free: Permanently
The clock is ticking down on a key law that protects Internet freedom. On October 1, 2015, a temporary moratorium on state taxation of Internet access will expire.
In 1998, Congress temporarily banned state and local governments from newly taxing Internet access. This ban has since been extended five times with enormous bipartisan support. If the moratorium is not renewed or made permanent, the potential tax burden on consumers could be substantial. To make matters worse, this tax is regressive: as a share of income, low income households pay ten times as much in communications taxes as high income households. For most families and businesses, the last thing they want to see is a puzzling array of new taxes on their Internet service bills.
The Permanent Internet Tax Freedom Act is a simple fix. This bipartisan legislation, which I introduced, would make the ban on Internet access taxes permanent. Earlier this month, it cleared the first hurdle by easily passing the House of Representatives. It now awaits action in the Senate, where I hope lawmakers will act quickly to pass this vital piece of legislation that will protect American consumers and help keep the Internet affordable.
Today’s Internet connects communities in the Sixth District with people throughout the United States and across the globe. Whether business owners, jobseekers, grandparents or students, all Americans benefit from tax-free access to the Internet. Internet access drives innovation and the success of our economy. The importance of ensuring access to this incredible gateway to knowledge, opportunity, and entrepreneurship cannot be understated.
Many people know Max Levchin’s story. He came to America from the Soviet Union at age 16. His family had $300 in their pockets, and he learned English by watching an old TV set he hauled out of a dumpster and repaired. Ten years later, he sold PayPal, the well-known Internet payments platform he cofounded, for $1.5 billion.
That is the greatness of the Internet. It offers that kind of opportunity to anyone willing to invest their time and efforts. This opportunity is precisely why I have worked in Congress to keep Internet access tax-free for families and innovators alike.
Year after year, Congress has chosen to temporarily extend the bipartisan ban on Internet access taxes. The time has come to make this ban permanent, once and for all. ThePermanent Internet Tax Freedom Act (PITFA) prevents a surprise tax hike on Americans’ Internet services and, in turn, ensures tax-free access to the Internet, the modern gateway to the American dream.
Bob Goodlatte represents Virginia’s Sixth District in Congress.