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Internet Tax Freedom Secured

  • Feb 26, 2016 | Gail Cole

 The Internet Tax Freedom Act has been made permanent.

President Obama has signed H.R. 644, the Trade Facilitation and Trade Enforcement Act of 2015, into law. In so doing, he has made permanent the Internet Tax Freedom Act (ITFA).

Section 922 of the bill creates a “permanent moratorium on Internet access taxes and on multiple and discriminatory taxes on electronic commerce.” It reads:

a) PERMANENT MORATORIUM.—Section 1101(a) of the Internet Tax Freedom Act (47 U.S.C. 151 note) is amended by striking ‘‘during the period beginning November 1, 2003, and ending October 1, 2015’’.

b) TEMPORARY EXTENSION.—Section 1104(a)(2)(A) of the Internet Tax Freedom Act (47 U.S.C. 151 note) is amended by striking “October 1, 2015’’ and inserting ‘‘June 30, 2020’’.

Part (a) permanently bans taxes on Internet access.

Part (b) gives states that currently tax Internet access until June 30, 2020 to phase out these taxes. States that tax Internet access:

  • Hawaii
  • New Mexico
  • North Dakota
  • Ohio
  • South Dakota
  • Texas
  • Wisconsin

In his Signing Statement for H.R. 644, President Obama called it “an important milestone to the overall U.S. trade agenda … that will help our workers and businesses to compete fairly with the rest of the world.” He did not reference the permanent moratorium on Internet access taxes.

Read the full text of H.R. 644.

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Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.