Internet Tax Ban: The Next Chapter

Today, the Senate Commerce Committee will consider extending the now-nine-year-old moratorium on internet taxation.  The present moratorium — enacted in 1998 and twice extended — bans taxes on internet access as well as discriminatory taxes on the internet and is set to expire on November 1.

By most accounts, the bill introduced by Sen. Thomas Carper (D.-Del.) would extend the moratorium by four years is likeliest to be enacted.  Sen. John Sununu (R.-N.H.), however, wants permanent extension of the Internet Tax Freedom Act.

But is that enough?  Grover Norquist, president of Americans for Tax Reform (ATR), says “It looks as though we’ll get an extension of the internet tax moratorium.  But it’s not clear whether it will be permanent, as Sen. Sununu wants,  or temporary.  Our goal will be to make it permanent.  If we can’t, we want it banned as long as possible.

“It’s one of the few taxes that the business community is good on,” added Norquist, meaning that it is a tax the business community is fighting aside anti-tax swashbucklers such as Norquist on.

ATR’s National Policy Analyst Elizabeth Karasmeighan, who works almost full-time on the internet access taxation issue, warned that unless a permanent moratorium on taxation of internet access became law, there would come a time when “your bill for the Internet will look like your phone bill.”

Norquist and the ATR also want to go a step further and phase out the grandfathering of nine states that were already taxing internet access before the 1998 moratorium was enacted.  The states that qualify for protection of the Internet Access grandfather clause include Hawaii, New Hampshire, New Mexico, North Dakota, Ohio, South Dakota, Texas, Washington and Wisconsin.