Tax Group Pushes For Permanent ITFA

The Council for Citizens Against Government Waste (CCAGW) is urging its members to press their senators to vote for the permanent moratorium on Internet taxes that could get a vote on the Senate floor as early as this week.

Many Republicans, as well as cable operators and other ISPs are big fans of the permanent tax moratorium.

"Concerned Taxpayer, your participation in this grassroots drive is so vitally important because if the Internet tax moratorium is not made permanent and is instead allowed to expire, Americans will face a tax hike estimated at $14.7 billion annually," said CCAGW President Thomas Schatz in an e-mail to supporters. "This new multibillion-dollar tax burden will not only stifle the Internet as a vital engine of economic growth, it will also penalize the tens of millions of Americans who now spend much of their work time and playtime online."

The Permanent Internet Tax Freedom Act, which has already passed in the House as part of a trade bill last year, was stripped from the bill that eventually passed the Senate, though the non-permanent Internet Tax Freedom Act (ITFA) was renewed for a year as part of the associated omnibus spending bill.

The Permanent ITFA prevents taxes on Internet access and gradually phases out the handful of taxes that were grandfathered when the bill was first passed in 1998.

One of those states was Illinois and Sen. Dick Durbin (D-Ill.) led the effort to get the bill struck from the trade bill. He said he supported it, but only combined with another bill, the Marketplace Fairness Act, that would allow local taxes on Internet purchases to help make up for the revenue that would be lost in the tax phase-out, of which Republicans and ISPs are not big fans.

Sen. Patrick Leahy (D-Vt.), ranking member of the Senate Judiciary Committee, seconded Durbin and said he strongly supported the online sales tax. Leahy said it was time to start "leveling the playing field" and "to worry as much about the citizens of our own communities as conglomerates no one ever sees."

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.