The Issue

Keep Access to the Internet Free from Taxation

Support making the Internet Tax Freedom Act permanent

Keep Consumer Access to the Internet Free from Taxation and Prevent Multiple and Discriminatory Taxation of Goods and Services Sold over the Internet

WHAT ITFA DOES:  Protects Consumer Internet Access from Taxation Permanently

  • Prevents state and local taxation of consumer access to the Internet
  • Prevents imposition of unfair (multiple and discriminatory) state and local taxes on all Internet sales transactions
    • Only one state can tax each transaction
    • Prevents online sales from being taxed at a higher rate
  • This introduced House and Senate legislation does not address the online sales tax collection issue but does prevent taxes on Internet access and unfair taxation of Internet sales

WHY ITFA IS IMPORTANT

Access to the Internet is critical for Working Families

  • Jobs:  Access to the Internet is a critical tool for individuals seeking jobs
  • Education and Healthcare:  Internet access provides a path for educational advancement, health care monitoring and access to medical resources
  • Small BusinessThe Internet provides small businesses and entrepreneurs with access to new markets and more consumers across the country

Extending the Moratorium Encourages Innovation and Economic Growth

  • Innovation:  Promotes a nationwide economic environment that fosters innovation and broadband investment, expanding the reach of the Internet
  • Gateway to Opportunity:  Minimizes taxation of this critical gateway to education, healthcare and entrepreneurial opportunities, regardless of race, income or neighborhood
  • Global Competitiveness:  Ensures ongoing investment, fair taxation and the opportunity for all businesses to participate in today’s global economy

 Eliminating the Risk of Excessive Taxation Protects Consumers

  • Outdated/Complex Tax System:  Over 10,000 different state and local taxing jurisdictions across the nation tax communications services.  ITFA keeps this excessive tax burden from being expanded to Internet access
  • Excessive Tax Rates:  Average tax rates imposed on communications services are already extremely high:
    • 17% on telephone/voice services
    • 12% on cable/video services
    • Compare…average general Sales tax rate of 7%
  • Studies indicate that cost is a significant factor affecting consumer broadband adoption and reducing consumer access to the Internet:
    • Communications taxes are particularly regressive – allowing taxation of Internet access would significantly impact consumer adoption