Legislative update: House approves permanent internet tax ban

House approves permanent internet tax ban

The House last evening approved, by voice vote, H.R. 235, the Permanent Internet Tax Freedom Act.

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H.R. 235 would make permanent a moratorium on state and local taxation of internet access and on multiple or discriminatory taxes on electronic commerce.

The House passed H.R. 235 under suspension of the rules—a procedure that requires the vote of at least two-thirds of voting members to pass a bill.

Background

The Internet Tax Freedom Act currently:

  • Prohibits state and local governments from imposing taxes on internet access and some taxes on electronic commerce until October 1, 2015.
  • Contains “grandfather rules” that allow some state and local governments to continue taxing internet access if such tax was generally imposed and actually enforced before October 1, 1998. The grandfather rules generally apply until October 1, 2015.

H.R. 235 would make permanent the prohibition on taxes on internet access and certain taxes on electronic commerce, but would not extend the grandfather rules.

Further action

The Senate has not scheduled action on similar legislation, S. 431 the Internet Tax Freedom Forever Act.

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