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Procedural Hurdle Threatens to Derail Internet Tax Freedom

This week, the Senate is poised to vote on a permanent extension of the Internet Tax Freedom Act. The Act, first enacted as a temporary measure in 1998, prohibits states and localities from taxing access to the internet, and has traditionally been extended a year at a time as part of budget negotiations.

Now, the ban stands to become permanent, guaranteeing that access to the greatest source of information and education since the printing press will not be hampered by tax collectors eager for a piece of the action. The other benefit of the ban is that it would be retroactive. When the original ban was passed, states and localities already taxing internet access were grandfathered in, and have been allowed to continue this pernicious practice ever since. The permanent version of the ban would end that.

The Permanent Internet Tax Freedom Act (PITFA) enjoys wide bipartisan support, but let’s not start celebrating yet. There still exists a major procedural hurdle that could derail PITFA and send legislators back to the drawing board.

The problem is this: a group of senators, chief among them Dick Durbin (D-IL), have long been trying to implement the so-called Marketplace Fairness Act, a bill that extends state taxation authority to remote sellers engaging in e-commerce. While brick and mortar stores love the idea of hampering their internet competitors through more taxes, many in Congress recognize the damage such a policy would do to small businesses trying to eke out a living online. Bearing this in mind, proponents of the Marketplace Fairness Act want to use PITFA as a sweetener to induce more senators to support the effort. If the internet tax ban is extended permanently this week, that bargaining chip will no longer be on the table, and future efforts to tax internet sales will be more likely to fail.

If this all seems like inside baseball, it’s because it is. Only in DC would people vote against a policy they agree with because they want to use it as leverage later. Unfortunately, that’s the way these Hill Critters think, and it’s up to us to keep them honest.

Therefore, when certain members of the Senate try to strip PITFA from the bill to which it’s attached, we have to make certain that they fail. The internet is too important to allow it to be a pawn in backroom political negotiations.

Republicans need 60 votes to override the effort to strip PITFA out of H.R. 644. FreedomWorks has already issued a preemptive Key Vote notice, indicating that any attempt to do this will count negatively to Members’ scores on the FreedomWorks Congressional Scorecard. But you can make a difference by calling your senators and asking them to vote to keep the internet tax free, forever.