House Votes to Make ISP Tax Ban Permanent

If the Senate follows suit next week, almost a half-billion dollars in taxes on Internet access service will be phased out by 2020, providing a tax break to multichannel video programming distributors (MVPD, or pay-TV) subscribers in seven states, and making broadband access cheaper. The House on Dec 11 voted, for a second time, to make the moratorium on Internet access taxes permanent. It had already voted to do so back in June, approving the stand-alone Permanent Internet Tax Freedom Act (ITFA), but that did not pass the Senate.

Dec 11's version of the moratorium, added as a rider on a customs and trade bill, required the House to vote again on the issue. The bill would permanently bar state and local taxes on ISP access, and sunset the seven states, including Texas, whose ISP taxes were grandfathered when the initial ITFA bill passed in 1998. It also has an e-commerce provision that prevents dual taxation -- two states taxing the same Internet transaction.