For the fourth time in nine years Congress is again struggling with whether taxes that discriminate against electronic commerce should be allowed. Also, for the fourth time Congress is struggling over whether access to the Internet should be burdened with an additional layer of taxation—placing a discriminatory tax on just accessing the Internet. This debate has been popularly referred to as the Internet tax debate.
These arguments are trotted out every couple years because Congress has never been able to bring itself to say no to any tax, even if blatantly discriminatory, for more than a couple years at a time—almost as if the members of Congress think that sooner or later discrimination will be okay.
And yes the debate really is that easy. The states and local taxing jurisdictions have for years sought to guarantee such bad acts as:
- Add a new layer of taxes onto Internet access;
- Charge new taxes on purchases simply because they were bought using the World Wide Web; or
- Tax each email that is sent.
The couple of times that the moratorium on such bad acts lapsed, various state or local taxing authorities jumped in to add their discriminatory tax to the mix and then demanded that any new moratorium protect those tax schemes. Now they are demanding that these opportunistic discriminatory taxes remain in place even while their spending practices remain out of control.
The time for debate was almost a decade ago, when the Advisory Commission on Electronic Commerce recommended a permanent moratorium on discriminatory Internet taxes. Now is the time for action. In 10 years not one good argument supporting discrimination has been made— even while many arguments have been made to try to distract from that fact.
The time is well past to make clear that discriminatory tax treatment for using the Internet is wrong. And the time is well past to make the Internet tax moratorium permanent.