On June 18, 2014, the House Judiciary Committee ordered reported to the House of Representatives by a vote of 30 to 4, H.R. 3086, the Permanent Internet Tax Freedom Act.

The Council for Citizens Against Government Waste (CCAGW) sent a letter to committee on June 17, 2014 supporting this legislation and urging final passage before the August recess.  The legislation has wide bipartisan support in Congress, with 221 cosponsors.  The Senate companion bill, S. 1431, the Internet Tax Freedom Forever Act has 50 cosponsors.

In 1998, the Internet Tax Freedom Act placed a moratorium on discriminatory taxes on the Internet and taxes on Internet access.  With wide bipartisan support, the Internet tax ban was extended in 2001, 2004, and 2008.  For 16 years, the ban on these inequitable taxes has benefited millions of Americans by enabling them to conduct transactions on the Internet free from worry about additional tax burdens.

During the debate over the moratorium in 2004, CCAGW President Tom Schatz noted that “a tax ban does not constitute a ‘loss’ for government officials because the money was never theirs to begin with,” Schatz continued.  “It keeps money in the hands of people who earn it.”  This sentiment remains true today.

One of the many problems with taxing the Internet is that when something becomes more costly, people will engage in less of it.  For example, today, nearly every business enterprise uses the Internet to communicate with customers, and share information about its goods and services.  However, the remarkable growth and future development of the Internet is threatened if the Internet tax moratorium is not extended.

Any new taxes on Internet access would affect job seekers who may not be able to pay for these additional taxes, as most employers now require prospective employees to fill in their job applications online; households with children who are increasingly required to perform schoolwork online; those who prefer shopping online; and, individuals who connect with friends electronically.

It is important that this measure be finalized prior to the November 1, 2014 expiration of the current moratorium on Internet taxes.