Congress Enacts Permanent Ban on State and Local Internet Taxes

By Sally P. Schreiber, J.D.

Congress on Thursday passed the Trade Facilitation and Trade Enforcement Act of 2015, H.R. 644, which would make permanent the “moratorium on states and localities taxing Internet access or placing multiple and discriminatory taxes on internet commerce” (Conference Report, p. 231). The Senate passed the bill on a 75–20 vote. It had been passed by the House of Representatives in December and now goes to President Barack Obama, who is expected to sign it into law.

The existing temporary moratorium on state and local internet access taxes, enacted by the Internet Tax Freedom Act, P.L. 105-277, has been extended multiple times since 1998. Besides making the ban permanent, Thursday’s legislation has a transition rule for states with internet access taxes that were grandfathered under the Internet Tax Freedom Act and have not yet been repealed. Only six states still have these taxes, and the legislation allows the states to postpone repealing them until June 30, 2020.

Sally P. Schreiber (sschreiber@aicpa.org) is a Tax Adviser senior editor.

Newsletter Articles

SPONSORED REPORT

Click-Through Nexus: Pushing the Boundaries of Sales Tax Compliance

Sales and use tax compliance has been complicated by nexus expansion. In this report, we provide an overview of this issue and include a handy state-by-state summary of click-through nexus or notification requirements.

PRACTICE MANAGEMENT

2015 Tax Software Survey

See how nearly 5,000 paid CPA tax preparers rated the strengths and weakness of major tax preparation software products they used in 2015.