A permanent ban on states and localities taxing internet access or placing multiple and discriminatory taxes on internet commerce is included in a conference agreement reached today.
House and Senate negotiators reached a bicameral, bipartisan compromise on a conference agreement for H.R. 644, the “Trade Facilitation and Trade Enforcement Act of 2015” that generally concerns trade and customs items.
The conference agreement includes a provision that would make permanent the ban on states and localities taxing internet access or placing multiple and discriminatory taxes on internet commerce. The measure would allow grandfathered states and localities through June 2020 to phase-out existing taxes.
The conference agreement would be paid for by expanded customs user fees and increased penalties for a failure to file a tax return.
The conference agreement reconciles the differences between House and Senate versions of the legislation, and would formally authorize the U.S. Customs and Border Protection service as well as address other trade and customs matters.
The conference agreement reflects a compromise between previously passed House and Senate versions of the customs legislation. Before becoming law, the agreement would need to be approved by both the House and Senate and signed into law by President Obama. Congress has not yet scheduled votes on the conference agreement.
The “Internet Tax Freedom Act” was extended until December 11, 2015, as part of a continuing resolution to fund the federal government through December 11, 2015, as passed by Congress and signed by President Obama on September 30, 2015. The legislation prevents state and local governments from taxing internet access, or imposing multiple or discriminatory taxes on electronic commerce. States and localities that had imposed and enforced taxes on internet access prior to October 1, 1998, could continue to do so under “grandfather provisions." Seven states impose tax internet access.
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