Senators Combine Marketplace Fairness and Internet Tax Bills

July 18, 2014

By Julia Pulidindi

Earlier this week, over NLC's objections, the House passed the Permanent Internet Tax Freedom Act (PITFA, H.R. 3086), a bill that would strip local governments of the authority to tax or impose fees on Internet access.

To help foster the growth of the Internet, the Internet Tax Freedom Act (ITFA) was first passed in 1998 and placed a temporary ban on taxing Internet access; the current ban expires on November 1, 2014.

In addition to making the temporary ban permanent, PITFA strips states who were "grandfathered" under ITFA at a cost of over $500 million a year in lost revenues (according to the Congressional Budget Office). Those states are Hawaii, New Mexico, North Dakota, Ohio, South Dakota, Texas, and Wisconsin. For additional information on the costs of a permanent ban, click here

With the House's vote, NLC will now focus its advocacy on the Senate where Senators Enzi (WY), Durbin (IL), Alexander (TN), Heitkamp (ND), Collins (ME) and Pryor (AR) recently introduced the Marketplace and Internet Tax Fairness Act, S. 2609, which NLC supports. This bill combines the Marketplace Fairness Act (with several technical changes), a top legislative priority for cities, and a 10-year extension of the Internet Tax Freedom Act.