On Feb. 11, by a vote of 75 to 20, the Senate passed Conference Report 114-376 to accompany H.R. 644, the Trade Facilitation and Trade Enforcement Act of 2015, which makes permanent the existing moratorium on state and local taxation of Internet access or imposition of multiple and discriminatory taxes on Internet commerce.
The existing moratorium, originally enacted by the Internet Tax Freedom Act (P.L. 105-277, §1101; §1104, 10/21/1998) and extended multiple times, most recently by P.L. 114-113 (H.R. 2029, Consolidated Appropriations Act, 2016), is set to expire on Oct. 1, 2016.
The original moratorium included a grandfather clause to give states that were then taxing Internet access some time to transition to other sources of revenue, and this legislation gives those states still taxing Internet access – Hawaii, New Mexico, North Dakota, Ohio, South Dakota, Texas ($25 exempt), and Wisconsin – additional time by delaying the phase-out of the grandfather provision until June 30, 2020.
The conference report, which was approved by the House on Dec. 11, 2015, is now awaiting President Obama’s signature.