House Passes Permanent ITFA

The House by voice vote has agreed to make permanent the Internet Tax Freedom Act, which is a moratorium on state and local taxes on Internet access.

Mayors, governors and telecom officers had opposed making the bill permanent, while ISPs had, unsurprisingly, favored the bill., which drew wide and generally bipartisan support--it had almost 200 co-sponsors from both parties, and now moves on to the Senate.

ITFA expired unless periodically unless reauthorized, which it has been five times since 1998, most recently through September 2015 after the moratorium was extended last December as part of a must-pass appropriations bill. Rep. Bob Goodlatte (R-Va.), who helped spearhead the legislation, said that the last thing Americans needed was another tax bill. He pointed out that without a moratorium, ISPs could be subject to over $6 billion in new taxes.

Rep. Anna Eshoo (D-Calif,), another bill backer, suggested another last thing she wanted to see was making it harder for people, particularly lower income and minorities, to get affordable broadband. 

Rep.Steve Cohen (D-Tenn.) said making the moratorium permanent was important to insure minorities had access to broadband so they could fully participate in society. He had warned that states like his, without an income tax, would add an ISP tax to its list of regressive taxes if allowed to tax Internet access.

Rainbow PUSH, which argues that access to communications is a civil rights issue, was among the groups supporting the bill.

The bill sunsets the six states whose taxation was grandfathered,. but he said he would be willing to work with the Senate on a phase-out.

House passage was a victory for the National Cable & Telecommunications Association.

“We applaud Chairman Goodlatte and Ranking Member Eshoo on today’s House passage of the Permanent Internet Tax Freedom Act (HR 235)," said NCTA President Michael Powell. "The bill will finally make permanent the current moratorium on burdensome state and local taxes on Internet access. By preventing these taxes, the bill keeps down the cost of connectivity, enabling more American consumers and businesses to join the online world and the Internet to continue to power U.S. economic growth. We urge the Senate to quickly pass its companion legislation so this tax moratorium can finally become permanent.”

USTelecom President Walter McCormick, who represents phone company ISPs, was equally please with the bill's passage.

“We commend the U.S. House of Representatives on the passage today of H.R. 235, legislation sponsored by Judiciary Chairman Bob Goodlatte (R-VA) and Representative Anna Eshoo (D-CA) that makes ITFA permanent," he said. "The legislation will protect consumers from taxes on Internet access services, while encouraging innovation and investment. We applaud the House for moving this legislation forward in ample time for the Senate to pass it before the current temporary moratorium expires at the end of October.”

Ditto CTIA, which represents wireless broadband service providers.

“With today's vote, Americans are one step closer to keeping their Internet access tax free. We hope the Senate will follow suit as soon as possible to avoid potentially negative consequences for consumers if ITFA lapses," CTIA VP of government affairs Jot Carpenter said.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.