[Congressional Record (Bound Edition), Volume 160 (2014), Part 6]
[Senate]
[Page 8987]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          INTERNET TAX FREEDOM

  Mr. THUNE. Mr. President, I rise today to speak about the Internet 
Tax Freedom Forever Act, legislation I introduced on a bipartisan basis 
with my colleague Senator Ron Wyden to make the expiring Internet tax 
moratorium permanent. Because of the moratorium Americans have not been 
taxed on Internet access for 16 years, but this is going to change and 
new taxes will be levied starting in November if Congress doesn't act 
soon.
  I am proud to work with Senator Wyden on this bill, the lead Senate 
sponsor of the original Internet Tax Freedom Act that passed in 1998. 
This landmark law known as ITFA imposed a Federal moratorium that 
stopped State and local governments from placing taxes on Internet 
access. This moratorium has been extended three times, and it has been 
critical to the rapid growth of the Internet.
  As we all know, the Internet provides unprecedented economic and 
social benefits. Mom and pop businesses in places such as South Dakota, 
Oregon, and across America found access to consumers and new business 
opportunities that are only possible through the Internet. Job seekers 
and entrepreneurs are finding opportunities that were once difficult to 
discover. Educators are exploring innovative tools and techniques that 
are powered by the Internet to equip students with the skills they will 
need for the 21st Century, and health care professionals are remotely 
providing services that are saving lives in rural areas. The idea 
behind the moratorium is straightforward. By not taxing Internet access 
we encourage broadband adoption and investment, which spurs all of the 
exciting activities that I just mentioned.
  The Internet is a gateway to tremendous societal benefits. It is, 
frankly, astounding when you consider that it wasn't very long ago that 
the Internet was considered a novelty and only for the tech savvy. 
Today it is a must-have resource, the existence of which we almost take 
for granted. We cannot take for granted, however, that the moratorium 
on Internet access taxes has contributed to the Internet being accessed 
by hundreds of millions of Americans every single day. Thanks to the 
16-year ban, consumer access to the Internet is free from State and 
local taxation for nearly all Americans. This gives consumers a welcome 
break on their monthly bills.
  In the commerce committee we talk a lot about finding ways to 
encourage greater broadband deployment across all of America, and as 
cochair of the Congressional Internet Caucus, I worked with colleagues 
on both sides of the aisle to find ways to promote the Internet as an 
engine of economic growth and economic freedom. One of the ways that we 
can do that is by making broadband more affordable.
  State taxation of Internet service will make broadband more 
expensive, which is at cross-purposes with our goal of encouraging 
Internet access and deployment. This doesn't make a lot of sense. The 
moratorium also benefits consumers by prohibiting multiple and 
discriminatory taxes on goods and services sold over the Internet. This 
means consumers won't be taxed by multiple States on the same sale and 
States won't tax Internet sales more than mail order or telephone 
sales.
  Unfortunately, the Internet tax moratorium is set to expire on 
November 1. Because of this, many Internet service providers are 
planning to send out notices to their customers informing them that 
they may have to start paying taxes on Internet access if Congress 
fails to act. I expect that many millions of Americans who use the 
Internet will not be happy when they realize that their phone or 
Internet bill is going to suddenly increase. Two things are for sure: 
Expiration of ITFA will not encourage more Americans to get online to 
do commerce, civic engagement, or social media; and countless Americans 
will be calling Congress demanding that we keep taxes off of Internet 
access.
  Rather than wait for angry constituents, let us be proactive and pass 
the Internet Tax Freedom Forever Act without delay. My bill with 
Finance Committee Chairman Wyden provides for a permanent extension of 
the moratorium. By passing a permanent extension we will provide 
certainty to Internet consumers in every State. Making the moratorium 
permanent also means that Congress won't have to waste time and energy 
passing yet another extension, year after year, into the future. There 
are plenty of other areas for Congress to focus on.
  Our bill also eliminates the grandfather clause that currently allows 
6 States to tax Internet access. Eliminating the moratorium's 
grandfather provision will provide consumers and businesses with a tax 
break. This includes consumers and businesses in my State of South 
Dakota, where our legislation will make Internet access less expensive, 
thus helping to encourage broadband deployment.
  The Internet Tax Freedom Forever Act currently has 46 cosponsors, 
nearly half of the Senate. The bipartisan cosponsors of the legislation 
understand the tremendous benefits provided by ensuring Internet access 
is not taxed and the discriminatory taxes are not applied to the 
Internet. I strongly encourage my colleagues in the Senate to join 
Senator Wyden and me and the 46 other cosponsors in this fight. When 
the Senate reconvenes after the Memorial Day recess, we should move 
quickly to extend the tax moratorium and to ensure that Americans don't 
wake up on November 2 with new, unexpected taxes.
  In the coming weeks and months, I plan to continue raising the need 
to pass our bipartisan legislation.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maryland.

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