U.S. House of Representatives
Committee on the Judiciary
F. James Sensenbrenner, Jr., Chairman
For immediate release
Contact: Jeff Lungren/Terry Shawn
November 19, 2004
House Passes Ban on Internet Access Taxes
Measure Now Will Be Sent to President Bush
WASHINGTON, D.C. - The House today passed by voice vote legislation that provides for a four-year ban on Internet access taxes as well as prohibiting States and localities from imposing multiple and discriminatory taxes on electronic commerce. This four-year extension is retroactive to November 1, 2003; therefore, the ban will expire on November 1, 2007. Because the Senate on Wednesday approved the legislation, S. 150, it now heads to President Bush for his signature.
House Judiciary Committee Chairman F. James Sensenbrenner, Jr. (R-Wis.), a leader for permanently banning Internet access taxes, stated, “Enacting this legislation is a big win for the majority of American Internet users. Without any action by this Congress, Internet commerce would be subject to State and local taxes in thousands of jurisdictions. The digital economy and its participants are more vulnerable if we do not act - even if this legislation is far inferior to the bipartisan legislation the House passed last year that permanently banned Internet access taxes.”
The House by voice vote in September 2003 passed legislation (H.R. 49) that included a permanent ban on these taxes. However, some in the Senate were intent on allowing States to tax Internet access and refused to pass the bipartisan House bill, allowing the then-existing moratorium to expire on November 1, 2003. Months later, the Senate passed its version of the legislation, S. 150. House leaders, led by Chairman Sensenbrenner, have continued to fight for a permanent, tax-free Internet since then.
“Wisconsin Internet users will benefit because I specifically inserted into this legislation a provision ending the ‘grandfathering’ for Internet access taxes imposed by the State of Wisconsin. I believe this Internet taxation by the State of Wisconsin that is supported by Gov. Jim Doyle and Sen. Herb Kohl should end immediately. However, Sen. Kohl and Gov. Doyle fought to keep Wisconsin’s Internet tax in effect; thus freedom from Internet taxes will come in November 2006 for Wisconsin users. Elimination of the Wisconsin Internet tax will translate into real savings for Wisconsin users given the State’s high five percent sales tax on Internet access,” added Chairman Sensenbrenner.
The legislation passed today does not exempt Internet retailers from collecting and remitting sales taxes to the States. Furthermore, this legislation is “tech-neutral” by providing tax freedom to all forms of Internet access.