A bill passed by the House on Tuesday forbids state and local governments forever from taxing Internet access, reports the Hill.
For Republicans, the point of the Internet Tax Freedom Act, originally enacted in 1996, is to reinforce market stability and consumer certainty. The recent measure would renew the almost expired extension passed in 2007.
“This legislation prevents a surprise tax hike on Americans’ critical services this fall,” said House Judiciary Chairman Rep. Bob Goodlatte. “It also maintains unfettered access to one of the most unique gateways to knowledge and engine of self-improvement in all of human history.”
Although some Democrats like Rep. Judy Chu of California were concerned about the permanent status of removing taxation power, they nevertheless allowed the bill to pass. In particular, Chu was worried that prohibiting governments from taxing Internet access doesn’t take into account changing and unique circumstances which governments sometimes are forced to face.
“I believe that a permanent moratorium would make reexamination of technology and market realities very difficult in the future,” said Chu. “A permanent moratorium would impede on the state or local governments’ ability to make taxing decisions that are right for them.”
The bill, however, still needs to move through the Senate, where it is likely that Democratic-controlled chamber will try and tack on the Marketplace Fairness Act. Under the act, out-of-state sellers would be subject to sales taxes within the state.
“Internet access taxes place an unnecessary burden on consumers in order to do something the market is already handling quite effectively,” said Matthew Glans, a senior policy analyst for the free-market think tank Heartland Institute. “Making the Internet access tax moratorium permanent would help broadband access and development expand while reducing the need for government broadband spending.”