United States

Multistate: Permanent Internet Tax Freedom Act Passes House of Representatives

Jun 15, 2015
From KPMG TaxWatch

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On June 9, 2015, the House of Representatives approved, by voice vote, H.R. 235, the Permanent Internet Tax Freedom Act.  Recall, as part last year’s “Consolidated and Further Continuing Appropriations Act, 2015” the Internet Tax Freedom Act (ITFA) was extended once again to October 1, 2015. If enacted, H.R. 235 would permanently prohibit state and local governments from imposing taxes on charges for Internet access, or imposing any multiple or discriminatory taxes on electronic commerce. States and localities that had generally imposed and actually enforced taxes on Internet access prior to October 1, 1998, have continued to do so under the ITFA’s so-called grandfather provisions. Those grandfather provisions, which affect about six states, are set to expire on October 1, 2015, under the extension enacted last year. They are not extended further under H.R. 235. In a floor statement on the bill, Judiciary Committee Chair Bob Goodlatte of Virginia (also principal sponsor of H.R. 235) acknowledged concerns over the expiration of the grandfather clause. He indicated he was “open” to working with the Senate on a final phase-out plan. The Senate has not yet scheduled action on similar legislation (S. 431). Please stay tuned to TWIST for future updates on the permanent ITFA.

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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.