The National Association of Counties (NACo) has issued an action alert, asking county leaders to contact their members of the U.S. House of Representatives to vote against H.R. 235, the Permanent Internet Tax Freedom Act (PITFA). H.R. 235 would “permanently extend the Internet Tax Freedom Act, which was a three-year moratorium enacted in 1998 on state and local taxation of Internet access and prohibited multiple or discriminatory taxes on electronic commerce. Since then, the moratorium has been extended several times and is currently set to expire October 1, 2015.”
NACo’s action alert provides the following background:
In general, taxation of Internet access refers to applying state and local taxes to the monthly charge that subscribers pay for access to the Internet through an Internet Service Provider. The original intent of the Internet Tax Freedom Act in 1998 was to encourage development of the Internet, which at the time was a new technology. This justification is no longer applicable given the substantial advancements in technology that have occurred since then.
Additionally, because of the current broad definition of “Internet access,” goods and services delivered over broadband, which has nothing to do with accessing the Internet, would be exempt from state and local taxation. This would result in increasing amounts of lost revenue on which state and local governments rely to fund essential services in their communities, like firefighters and police officers, schools, parks, libraries and continued investments to address aging infrastructure.