House votes to outlaw taxes on Internet service

The House on Tuesday passed legislation by voice vote that would permanently ban state and local governments from taxing Internet access. 

The largely uncontroversial bill would make permanent the Internet Tax Freedom Act, which is set to expire on Nov. 1. The original law passed in 1998, and Congress approved the most recent extension in 2007.

House Judiciary Chairman Bob Goodlatte (R-Va.) said the measure would prevent Americans from getting an unexpectedly higher tax bill for their Internet use.

“This legislation prevents a surprise tax hike on Americans’ critical services this fall,” Goodlatte said. “It also maintains unfettered access to one of the most unique gateways to knowledge and engine of self-improvement in all of human history.”

Goodlatte argued Congress should make the extension permanent to provide certainty to consumers.

“That is precisely why Congress has worked assiduously for 16 years to keep Internet access tax-free. Now we must act again, once and for all,” Goodlatte said.

Although the bill has wide, bipartisan support, some worry that as the permanent ban moves to the Senate, lawmakers will try to attach the Marketplace Fairness Act.

That controversial bill would allow states to collect sales tax from out-of-state sellers, and passed the Senate by an overwhelming majority last year.

In the House, some Democrats expressed concern that permanently extending the ban would limit the ability of state and local entities to review Internet policies.

“I believe that a permanent moratorium would make re-examination of technology and market realities very difficult in the future,” said Rep. Judy Chu (D-Calif.). “A permanent moratorium would impede on the state or local governments’ ability to make taxing decisions that are right for them.”

Nonetheless, Democrats allowed the measure to pass on a voice vote without forcing members to record their positions.