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house Bill H.R. 235

Is it Time to Ban State Taxes on Internet Access (Except the Ones That Already Exist)? Vote!

Argument in favor

Internet access is a vital part of modern life and should be tax-free. Banning taxes on e-commerce will benefit consumers, businesses, and the economy as a whole.

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09/16/2015
"Our free and open Internet has made invaluable contributions to democracy both here in the United States and around the world. Whether you are rich, poor, young or old, the Internet allows all people to seek out information and communicate globally." [sanders.senate.gov]
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BarackObama's Opinion
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02/25/2015
"The internet is a service. There shouldn't be any fees included with this service that may restrict the ability of some to not use the internet fully."
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DonaldTrump's Opinion
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09/16/2015
"Before we do anything, simplify it. Make it nice and easy for people to understand, and reduce taxes.” [allenbwest.com]
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Argument opposed

State and local governments should be able to impose taxes on internet access or e-commerce if they want to — it can be a very lucrative form of tax revenue.

ElizabethWarren's Opinion
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09/16/2015
"Voted YES on authorizing states to collect Internet sales taxes." [ontheissues.org]
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PacificCstar's Opinion
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08/19/2015
States that try and tax e-commerce just drive those businesses to less regulated states.
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Eric's Opinion
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04/16/2015
Should not be tax free but who should get the tax, the purchaser out the supplier? Figure it out before a law is discussed and passed.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
      senate Committees
      Committee on Finance
  • The house Passed June 9th, 2015
    Passed by Voice Vote
      house Committees
      Committee on the Judiciary
      Antitrust, Commercial and Administrative Law
    IntroducedJanuary 9th, 2015

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What is House Bill H.R. 235?

This bill would permanently extend the ban on state and local internet access taxes, and the ban on “multiple or discriminatory taxes” on electronic commerce. Under current law, the ban on state and local internet taxes would expire on October 1, 2015.

If you're buying something on the Internet, an example of “multiple taxes” on electronic commerce would be if the state where you live imposes a sales tax on the transaction and the state where the seller is located also imposes a tax on the transaction because it was made on the internet.

Discriminatory taxes, on the other hand, are taxes that treat electronic commerce differently than mail-order purchases, or going into a real brick-and-mortar store. The discrimination counts if the tax is only imposed on e-commerce, is applied at a different rate, or the tax has different collection requirements.

State and local governments that already have taxes on internet access and e-commerce would be able to keep them in place, as this legislation would only apply to taxes imposed after this bill’s enactment — meaning that existing taxes would remain unchanged. 

Impact

People who surf the internet, companies and vendors selling things on the internet between states, states with internet taxes, the Internal Revenue Service, and Congress.

Cost of House Bill H.R. 235

A CBO cost estimate is unavailable.

More Information

In-Depth: When this bill was introduced with bipartisan support the Chairman of the House Judiciary Committee and this bill's sponsor, Rep. Bob Goodlatte (R-VA) noted: 

“Business owners or jobseekers, grandparents or students, all Americans benefit from tax-free access to the Internet.” 

Currently, this bill has 188 cosponsors in the House — made up of 130 Republican and 58 Democratic lawmakers.

A study done by the Congressional Research Service notes that while 13 states used to have local internet taxes, six have since eliminated those taxes, leaving only Hawaii, New Mexico, North Dakota, Ohio, South Dakota, Texas, and Wisconsin.

In a paper published by the Center on Budget and Policy Priorities opposing the permanent extension of the ban on internet taxes, it was projected that tax revenues from these taxes in Ohio, South Dakota, Texas, and Wisconsin could total more than $500 million.

On the other side of the argument, proponents of banning internet taxes point to economic studies that indicate higher taxes discourage economic growth.

Media:


Summary by Eric Revell

(Photo Credit: demonpigeon.wordpress.com) (Raw Image)

AKA

Permanent Internet Tax Freedom Act

Official Title

To permanently extend the Internet Tax Freedom Act.