Internet tax battle revived in Congress
 

[June 22, 2015]  By Josh Peterson | Watchdog.org
 
 WASHINGTON – Legislative battles about taxes on the digital economy are heating up again in Congress.

On Wednesday, a House committee approved three bills dealing with states’ powers to tax the Internet, continuing a debate that has lasted for more than one session of Congress.

Photo Credit: Flickr/Creative Commons/ Maria Elena (http://bit.ly/1C3vGW3)
Photo Credit: Flickr/Creative Commons/ Maria Elena (http://bit.ly/1C3vGW3)
The fight over taxing the Internet is heating up again in Congress.Photo Credit: Flickr/Creative Commons/ Maria Elena (http://bit.ly/1C3vGW3)
Of the three bills, the Digital Goods and Services Tax Fairness Act of 2015 — sponsored by Rep. Lamar Smith (R-Texas) — is a wireless industry favorite, along with another taxation bill under consideration, the Permanent Internet Tax Freedom Act (PITFA).

PITFA – and its Senate counterpart, the Internet Tax Freedom Forever Act – would permanently ban state and local Internet access taxes, and “multiple or discriminatory taxes on electronic commerce.”

Currently, a temporary ban passed in late 2014 is in place until Oct. 1.

According to Rob Shrum, director of political advocacy for the wireless industry-affiliated MyWireless.org, “If the Internet access tax moratorium expires, the high state and local taxes that are already applied to wireless service could be expanded to include Internet-access, increasing the cost of service.”

During the hearing on Wednesday, House Judiciary Committee chairman Bob Goodlatte (R-Va.) said that Smith’s Digital Goods bill would help implement PITFA’s “ban on multiple taxes of Internet commerce” as well as the “discriminatory taxation of goods and services,” preventing consumers from being taxed by multiple jurisdictions.

The bill “provides a consistent, uniform sourcing framework to address this problem,” said Goodlatte.

Jot Carpenter, vice president for government affairs at CTIA-The Wireless Association, agreed with Goodlatte, calling the bill “a much-needed national framework that only Congress can enact to provide the certainty, stability and safeguards needed to keep the digital marketplace a thriving part of America’s overall economy.”

Rep. Jason Chaffetz (R-UT) introduced competing legislation on June 15, the Remote Transactions Parity Act (RTPA), which would require states to simplify their tax codes, and pay to set up, install and maintain software for remote sellers to collect sales taxes.
 
 The National Retail Federation commended Chaffetz, naming the bill a “retail legislative priority” for the year.
 
 “RTPA will provide sales tax parity at the point of purchase, so that Main Street retailers do not face a competitive disadvantage because they are required to collect the sales tax owed on purchases while remote and online sellers are not required to collect the tax,” said David French, NRF’s senior vice president for government relations, in a statement.

 A coalition of conservative groups including R Street Institute and Americans for Tax Reform, however, denounced the Chaffetz’s bill as “a massive expansion in state tax-collection authority and dismantling a vital taxpayer protection upon which virtually all tax systems are based.”
 
 Conservative organizations R Street and Americans for Tax Reform, among others, are also supporters of both PITFA and ITFA.