Congress gives final OK to banning local Internet taxes
ASSOCIATED PRESS
Senate Majority Leader Mitch McConnell of Ky. spoke on Capitol Hill in Washington on Feb. 9. State and local governments would be permanently barred from taxing access to the Internet under a bipartisan compromise the Senate approved on a vote of 75-20 today.
WASHINGTON » Congress voted today to permanently bar state and local governments from taxing access to the Internet, as lawmakers leapt at an election-year chance to demonstrate their opposition to imposing levies on online service.
On a vote of 75-20, the Senate gave final congressional approval to the wide-ranging bill, which would also revamp trade laws. President Barack Obama is expected to sign it.
“The Internet is a resource used daily by Americans of all ages,” said Senate Majority Leader Mitch McConnell, R-Ky., who brokered an agreement with a Democratic leader earlier this week that helped clear the way for passage. “It’s important that they be able to do all of this without the worry of their Internet access being taxed.”
The ban on local Internet access taxes had broad support. Even so, some lawmakers remained unhappy over its trade provisions and because the measure omitted a separate, more controversial proposal to let states force online retailers to collect sales taxes for their transactions.
Senate Minority Leader Harry Reid, D-Nev., said the bill was full of “missed opportunities and half-measures.”
Since 1998 in the Internet’s early days, Congress has passed a series of bills temporarily prohibiting state and local governments from imposing the types of monthly levies for online access that are common for telephone service. Such legislation has been inspired by a popular sentiment that the Internet should be free, along with Republican opposition to most tax proposals.
Until now, states that imposed Internet access taxes have been allowed to continue. Under the approved bill, those states would have to phase out their taxes by the summer of 2020.
Seven states — Hawaii, New Mexico, North Dakota, Ohio, South Dakota, Texas and Wisconsin — have been collecting a combined $563 million yearly from Internet access taxes, according to information gathered by the nonpartisan Congressional Research Service.
Forty-nine Republican and 26 Democratic senators backed the legislation today while 17 Democrats and three Republicans voted “no.”
The House approved the compromise in December with the backing of nearly all Republicans but just 24 Democrats.
The White House did not immediately provide a statement on whether Obama would sign the measure despite lawmakers’ widespread expectations that he would. That seemed to reflect the difficult political balancing act Democrats faced between a popular ban on Internet access taxes and trade provisions many of them considered insufficient or harmful.
The legislation, especially its trade provisions, has pitted the U.S. Chamber of Commerce and other business groups supporting the bill against opponents including the AFL-CIO and other labor organizations.
Supporters say the measure would strengthen U.S. trading by improving protections for American intellectual property like copyrights and trademarks and upgrading trade law enforcement at the country’s borders.
They also cite provisions reinforcing the government’s ability to head off China and other countries from manipulating their currency to make their exports more affordable, cracking down on imported products made with child labor and accelerating investigations into companies accused of evading the payment of duties.
Democratic critics complained that its trade protections were insufficient and said negotiators who wrote the compromise weakened it significantly, including the currency manipulation language.
Democrats also disliked provisions barring trade agreements that would curb some efforts to restrict greenhouse gas emissions, a major contributor to climate change, or would force the U.S. to revamp its immigration laws.
For years, the drive in Congress to permanently bar taxes on Internet service has languished alongside another effort to empower states to require online retailers to collect state and local sales taxes for online purchases. Supporters of enhancing the collection of online sales taxes say without that, brick-and-mortar stores face a competitive disadvantage.
In hopes of gaining leverage, senators backing the collection of online state sales taxes have long linked the two efforts.
A breakthrough came this week when McConnell agreed to hold a vote this year on the online state sales tax proposal. He reached that deal with No. 2 Senate Democratic leader Dick Durbin of Illinois, a strong advocate of the separate Internet sales tax measure.
Even so, some lawmakers were upset that the sales tax measure would be considered later, with no guarantee of success.
28 responses to “Congress gives final OK to banning local Internet taxes”
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Another uncompetitive hit to the local shopping malls.
In the meantime, this should be good for my Amazon shares.
Hawaii…What a surprise!
Well, technically Hawaii’s GET taxes everything. Some states want to specifically tax internet transactions, where the GET simply made no distinction.
That said, the only time a government entity should even remotely have the capacity to tax a direct internet transaction should be if the transactions buying flows through a government owned fiber optic line and even then the tax should be extremely minimal. Like a penny per $1,000 of value.
Golly, Sarge. Who would have thought that Hawaii was so anti-business?
Many small business rely on the internet to sell their products. Being tax free gives them an advantage.
Users, such as you and I, would also have been subject to this “tax” just for checking email and surfing the web.
See Below:
Congress voted today to permanently bar state and local governments from taxing “access to the Internet”.
Mike, read the article. The tax is not on goods purchased via the internet, the tax is on your access, as in what you pay to your service provider.
I’ll take care of the goods, and you take care of the internet access.
Finally! Government, keep your greedy hands off the internet!
Take your stinking paws off me…
Yep. One thing leads to another. First with the access then with the goods.
Every now and then… Congress does something “right”.
Thank God the Republicans are in charge.
But Trump is over charged. Smoke the circuit test?
Let me guess, Hirono and Schatz voted no. Not a surprise. Expect the state to find something else to bleed its residents.
Oahuan, I was guessing the same thing. So they still exist? And, of course, Obama will sign, since it’s Veto proof.
Exsanguine?
Finally our ‘DO NOTHING’ Congress has done something good for the people.
Bad thing is it doesn’t take effect till 2020.
2020? Why so long to take effect?
If anyone is an expert on missed opportunities and half measures it would be Harry Reid.
Does this mean my cable bill will be lower or is Oceanic going to add a made up fee?
Oceanic will add another made up fee.
Great for my TWC stocks.
What about the tax levied on Hawaii cell phone users that was used to pay for Albert Hee’s massages, California home for his kids, kid’s tuitions, vacations, grease palming endeavors, etc.?
That’s alright as long as Mr. Hee is laughing out a loud hee, hee, hee, instead of a ha,ha, ha.
Anyone from Hawaii was amongst the “Yes” vote?
Yes.
http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=113&session=1&vote=00113
IF you want to get elected in Hawaii, your middle name better be MORE TAXATION !!
Hawaii’s exorbitant taxes wouldn’t be so bad if they were spent wisely, but with a bunch of idiots in the Legislature, a numbskull as governor, we can be sure our tax dollars are spent VERY unwisely !!!
I don’t mind paying taxes as long as it is going to help the taxpayers. It’s the wasteful spending that irks us.