Return of the web tax. Be very afraid.
posted at 8:31 am on May 10, 2014 by Jazz Shaw
It’s nice to have someone looking out for you, even if you didn’t know that you had a guardian angel on your shoulder. For the majority of you, since you’re using some form of internet access to read this, you’ve been protected for the last fifteen years by the Internet Tax Freedom Act. It prevents most state and local governments from taxing your internet access fees. But unless Congress figures out something in the near future, that could all be coming to an end on November 1st.
Millions of Americans could be threatened with new state taxes on their Internet access this fall, as Congress struggles with how to extend an expiring moratorium on such levies.
The 15-year-old Internet Tax Freedom Act prevents most states and local governments from taxing access. The moratorium enjoys widespread bipartisan support in Congress.
Broad support, eh? So what’s the problem?
The tax reprieve, however, is set to expire on Nov. 1, and so far, lawmakers have taken few concrete steps to re-enact it as they debate whether to combine it with a separate, more controversial bill. That measure would allow states to collect sales tax from out-of-state online merchants.
Proponents hope that combining the two bills will increase pressure on Congress to negotiate a compromise on the long-delayed online sales-tax legislation.
“I think enough interested parties would insist that if we’re going to pass that [Internet-access tax moratorium], this other component might be attached to it,” said Rep. Jason Chaffetz (R., Utah), who is leading a House effort to reach a compromise on the sales-tax bill. He added: “To think the first would move unattached is fantasy land at this point.”
As so often happens in the complicated world of political thinking, I’m confused. How is a bipartisan move to extend a tax moratorium “fantasy land” unless it’s attached to … a tax? Who comprises this large contingent of people pushing to tax internet access… the Amish?
We’ve had more than a few lengthy discussions here about the MFA. And while I understand the issues being raised by brick and mortar sellers on this score, many readers here have provided ample arguments which raise serious concerns about doing it. But the debate currently taking place seems to have little to do with the bone we’ve been chewing these past few years. Reading through the quotes in this article, not only from Chaffetz, but from Dick Durbin and others, it’s difficult to see how this is an argument which makes the case of the MFA stronger. Instead, it seems like a case of taking a widely popular program – the current exemption – and lashing it to the MFA without offering anything balancing in return.
Nice tax exemption you’ve got there. Be a shame to see anything happen to it.
To me, it seems as if these are two unrelated proposals which each deserve a vote and should stand or fall on their own merits. Tying them together takes on the air of political skullduggery. And a renewal of the Internet Tax Freedom Act would pass on its own fairly easily, particularly in an election year. In fact, there’s already a bill waiting in the wings to do just that, and do so permanently. It’s been waiting for action since last year.