DALLAS, TX—The Institute for Policy Innovation (IPI) applauds efforts made today by the House Judiciary Committee moving forward on making the Internet tax moratorium permanent and refraining from introducing other issues that likely would have ended its progress in the House. But time is of the essence to pass the measure as the moratorium will expire on November 1 of this year, warned Bartlett D. Cleland, IPI Resident Scholar of Tax & Innovation Policy.
The Permanent Internet Tax Freedom Act would protect consumers from the increased costs in accessing and using the Internet by permanently extending the moratorium on Internet access taxes, and would prevent multiple and discriminatory taxation of Internet sales.
“If allowed to expire, states would begin to collect taxes on Internet access, or apply other discriminatory taxes that may already be in place but which have been held at bay during the moratorium,” said Cleland.
An average household’s taxes would increase by $50 to $75 each year if states apply their sales or telecommunications taxes to Internet access, said Cleland, citing figures from Scott Mackey, former chief economist for the National Conference of State Legislatures. “While that doesn’t seem like much, keep in mind that that’s about what a low-income family spends in a year on subsidized school lunches,” said Cleland. “Those who qualify for such programs are exactly those who will be most negatively affected by a lapsed moratorium.”
Cleland also warned that if Congress is cavalier and slow to act, businesses will be forced to invest resources to prepare to collect the new taxes. “Less economic growth and fewer jobs are the result,” said Cleland.
The Institute for Policy Innovation (IPI) is an independent, nonprofit public policy organization based in Dallas, Texas. IPI Resident Scholar of Tax & Innovation Policy Bartlett D. Cleland is available for interview by contacting Erin Humiston at (972) 874-5139, or erin@ipi.org.
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