House Passes Internet Tax Ban

computerlady writes "InfoWorld reports that the House of Representatives today voted a permanent ban on 'levying taxes unique to the Internet.' The Internet Tax Nondiscrimination Act would permanently prohibit taxing jurisdictions in the U.S. from levying such taxes as e-mail taxes, bandwidth taxes, or bit taxes. To become law, the bill would have to pass the U.S. Senate and be signed by President Bush. The Senate Commerce, Science and Transportation Committee approved its version of the bill July 31, and its next stop is the full Senate."

Comments

States Rights

[Dancin_Santa]

Don't mean to be a party pooper, but your state is still able to charge you a sales tax on all catalog and web transactions.

No one will come knock on your door if you don't pay, but it's nice to have that weigh on your mind, you tax-evading thief.

Re:States Rights

[freeefalln]

'levying taxes unique to the Internet.' The

Unique to the internet. that is whats important here. we all know that sales tax is long overdue on the internet, it will come into effect sooner or later.

Re:States Rights

[princewally]

Also, there has been a ban on interstate sales tax in many jurisdictions for many, many years. If you order something by mail from Oregon and you live in New Jersey, you don't pay sales tax.

In most states, you do have to pay sales tax if you order something from another state. The company isn't required to charge the tax. You are supposed to get an additional form from the state and declare your purchases yourself.

Re:States Rights

[Anonymous Coward]

That is correct. It's called a "use tax", but it's basically the same thing. It's hard for them to enforce, however.

Re:Isn't this a state thing?

[I8TheWorm]

Um.... since the Uniform Commercial Code was enacted?

Whee

[shoptroll]

Cool... I'm not too concerned about sales tax anyways, i mean you order stuff from a catalog or one of those shopping networks you gotta pay sales tax... Same principle i think

Prohibits taxing access, not e-commerce

[wayward_son]

This bill prohibits the taxing of the access to the internet, not sales taxes on goods purchased over the internet.

A good law. I think the politicians should keep their grubby hands off internet access.

Re:Finally, a step in the right direction!

[King Babar]

1/3? I don't know what tax bracket you're in, but after Fed, SS, Medicare, State, Local, property tax, Sales tax, auto registration, and other various fees, most of us in the U.S. pay over 50% of our salaries to the gov.

In a word, no we don't. Not if by "most of us" you mean "most US taxpayers". For a decently readable account of this and other economic "facts", there's a piece in the NY Times (free registration blah blah).

Re:Isn't this a state thing?

[digitalunity]

The point of this regulation wasn't to limit the states rights, it is to protect the citizens from unfair and discriminatory taxing. That's always a good thing. If this goes through, states can still tax you on things like online shopping, as long as it's a sales tax that applies to everyone. I would hate to go to amazon or ebay and get a message that they were collecting a 'Special Internet Tax' for whatever state of %(arbitrary#). Imagine checking your DSL or cable bill and finding a special tax line:

Network Access Tax: $23.30 @ .005 per MB

I don't think many people would put up with it. It's good that this bill came along. Along the same lines, it's also sad that they had to specifically prevent states from implementing discriminatory taxes as sources of revenue. Look at the Seattle dime espresso tax and the turnout; 67% of citizens said no. If states went along and implemented an internet usage tax, it's nearly a sure bet that zero of that revenue would be used to support the internet. It would have been especially unfair.

Re:Interstate is not Intrastate

[e5z8652]

Translation to help moderators understand the original post (It is a good point, linuxislandsucks probably types too fast and left some stuff out):

Taxing or restricting Interstate commerce accross state line sis a fed eral ba ili wick and is not controlled by the states '..

Re:Finally, a step in the right direction!

[guacamolefoo]

Can you remember the last time that Congress actually prohibited a form of taxation?

Poll tax. The Twenty Fourth Amendment was passed by Congress on August 27, 1962, and it was ratified by the several States in early 1964.

GF.

What this really means...

[deblau]

(if the bill passes the Senate and gets signed into law) is that no state may tax you for Internet access. This bill basically says that such a tax would be financially discriminatory, since apparently a tax on access would deprive some Americans of the ability to use a common communications medium. I guess the 'Net has finally hit the mainstream.

What this bill isn't, is a moratorium on taxation of Internet services (such as long distance/VoIP, catalog/retail shopping, web hosting, etc). The House have only said that no state may tax access to these services.