CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. US Senate Urged To Pass Internet Tax Moratorium

US Senate Urged To Pass Internet Tax Moratorium

by Mike Godfrey,, Washington

05 September 2014

With the United States House of Representatives having already passed the Permanent Internet Tax Freedom Act (PITFA), which would permanently extend a moratorium on internet access taxation, a coalition of 42 state and national organizations have come together to urge the Senate to pass equivalent legislation as soon as possible.

In a letter to all senators, the coalition's members say that failure by the Senate to act before November 1 this year, when the present moratorium expires, will lead to increased taxes for internet consumers, who are currently protected "from increased costs when accessing and using the internet, and from the discriminatory or duplicative taxation of e-commerce."

The letter adds that "taxes on communications services are already punitive and discriminatory. The average sales tax rate on voice services is 17 percent, and 12 percent on video services, while the average general sales tax rate is 7 percent. Excessive taxes will hinder continued growth in the digital space."

It also notes that the Federal Communications Commission FCC's National Broadband Plan already states "that the largest barrier to consumer adoption and expanded use of internet based services is cost."

"Allowing the internet access tax moratorium to lapse would certainly lead to higher tax rates on consumers and thus reduce the rate of adoption and innovation. Higher taxes on internet access undermines American economic competiveness and growth," it continues.

However, prior to the summer recess, the prospect of a "clean" equivalent to the PITFA being passed in the Senate was being complicated by certain lawmakers looking to link it with the more controversial Marketplace Fairness Act (MFA), which would allow states to impose sales taxes on online purchases, and which remains stuck in the House Judiciary Committee.

The MFA has become bogged down in the Republican-led House, where it has encountered a great deal of opposition and delay, mainly due to an aversion to what is considered to be a hike in taxation and an increase in tax compliance burdens on smaller businesses.

TAGS: compliance | tax | business | sales tax | tax compliance | commerce | law | internet | e-commerce | legislation | tax rates | United States | services | Communications | Tax

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »