On July 15, 2014, the House of Representatives passed the GFOA-opposed Permanent Internet Tax Freedom Act (HR 3086). The bill would permanently preempt state and local governments’ authority to assess taxes on Internet access and would specifically remove that authority from ten states that are currently permitted to do so under current law – Hawaii, New Hampshire, New Mexico, North Dakota, Ohio, South Dakota, Tennessee, Texas, Washington, and Wisconsin. The debate now moves to the Senate, where several Senators introduced the GFOA-supported Marketplace and Internet Tax Fairness Act on July 15. This act would give states and localities the authority to require remote sellers to collect and remit sales and use taxes on transactions made within the state, as well as temporarily (rather than permanently) extend the moratorium on state and local Internet access taxes for a period of ten years, while preserving the taxing authority of the ten grandfathered states and their localities.
GFOA members should immediately contact their Senators and urge their support for the Marketplace and Internet Tax Fairness Act, as well as their continued opposition to any efforts to make the Internet tax moratorium permanent.
Click here for additional information on the impact of a permanent moratorium to states and localities.