New Hampshire's Internet Tax Exemption
- Sales Tax News
- Sep 18, 2013 | Gail Cole
The federal Internet Tax Freedom Act, which places a moratorium on taxing internet access, was enacted in 1998. At that time, nine states had taxes on internet access in place. The existing internet taxes in those states, which included New Hampshire, were allowed to stand under the federal law.
New Hampshire's Communications Services Tax was created in 1990. It included internet services until last year, when then Governor John Lynch (D) allowed a bill containing an internet tax exemption to become law. As a result of that legislation, New Hampshire's previous grandfathered status under the Internet Tax Freedom Act no longer applies. Now, and so long as the Internet Tax Freedom Act is in place, New Hampshire can not impose a tax on internet access.
New Hampshire lawmakers who support the exemption argue that "the tax was being applied inconsistently depending on whether internet service providers bundled or unbundled charges for internet and other services." (Concord Monitor).
Unless federal lawmakers move soon to make permanent the provisions of the Internet Tax Freedom Act, it will expire in 2014. New Hampshire Senator Kelly Ayotte (R) has sponsored legislation that would keep internet access tax-free--one of several bills on that issue being considered. According to Sen. Ayotte, "E-commerce is thriving largely because the Internet is free from burdensome tax restrictions."
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