Eleventh Hour Passes for Internet Tax Moratorium

The Internet tax moratorium, a ban on taxes on Internet access fees, expired on Nov. 1. Although the House passed a bill in September to make the temporary tax ban permanent, the bill stalled in the Senate until Oct. 30, when senators agreed to debate the bill this week. With the House bill passed and the Senate debating the issue, states aren’t expected to start collecting access fee taxes just yet.

Catalogers and their industry advocates have been concerned that although the moratorium is focused on taxes on Internet service provider fees, some lawmakers would try to lump the issue together with an interstate sales tax bill.

“These bans are working just as the bill’s original authors, Rep. Chris Cox [R-CA] and Sen. Ron Wyden [D-OR], intended: Internet use and electronic commerce are growing rapidly, while the digital divide continues to close,” Jerry Cerasale, senior vice president, government affairs for the Direct Marketing Association in Washington, said in a statement. “Making the Internet Tax Moratorium permanent will undoubtedly allow the Internet to continue to grow as a vehicle for global communication, education, and commerce, and is essential if we want to keep America at the forefront of this still-emerging technology.”

On the other side of the spectrum, a permanent ban would be “the federal government telling state and local governments that they no longer have control over their revenue sources,” David Quam, director of state-federal relations at the National Governors Association told the Associated Press.