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for states with internet access taxes that were grandfathered under the Internet Tax Freedom Act and have not yet been repealed.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 (email@example.com) is a Tax Adviser senior editor.