The Senate today passed, 72 to 20, a conference agreement for H.R. 644, the “Trade Facilitation and Trade Enforcement Act of 2015” that generally concerns trade and customs items. The legislation 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. Read text of the conference agreement.
The House on December 11, 2015, passed the conference agreement, 256 to 158. Therefore, with today’s action by the Senate, the legislation will be sent to the White House for action by the president.
First enacted in 1998, 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 prevented 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.
The Protecting Americans from Tax Hikes Act (PATH Act) subsequently extended through October 1, 2016, the general ban on states and localities taxing internet access or placing multiple and discriminatory taxes on internet commerce.
© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.