United States

Federal: President Obama Signs Permanent Internet Tax Freedom Act

Feb 29, 2016
From KPMG TaxWatch

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On February 24, 2016, President Obama signed a customs and trade bill (H.R. 644) that includes provisions making the Internet Tax Freedom Act permanent. Recall, the federal moratorium on state and local taxation of Internet access and multiple or discriminatory taxes on electronic commerce has been extended several times since the ITFA was first enacted in 1998. Under the now-permanent law, the ITFA’s current grandfathering provisions, which allow certain states to continue to tax Internet access, are extended only to June 30, 2020. After that date, previously grandfathered states will be prohibited from taxing Internet access.  H.R. 644 passed the House in December, but final passage was stalled in the Senate—purportedly because certain members of the Senate objected to the insertion of permanent ITFA provisions. It has been reported that the Senate vote was conditioned on an agreement that the Senate would consider Marketplace Fairness legislation at some point this year. Please stay tuned to TWIST for future updates on federal legislation affecting state taxes.

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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.