April 19, 2005

Wyden Introduces Legislation to Make Internet Tax Ban Permanent

Bipartisan 1998 law has successfully protected Internet users,online businesses from unfair and discriminatory taxation

Washington, DC -- U.S. Senator Ron Wyden (D-Ore.) today introduced legislation to make permanent an existing ban he authored on multiple and discriminatory taxation on Internet access and online sales. Wyden joined U.S. Senator George Allen (R-Va.) and U.S. Representative Chris Cox (R-Calif.) at a press conference in Washington to unveil the bipartisan legislation, which extends the Cox-Wyden Internet Tax Freedom Act of 1998. That law bans three types of taxes that unfairly single out the Internet: taxes on Internet access, double taxation (for example, by two or more states) of a product or service bought over the Internet, and discriminatory taxes that treat Internet purchases differently from other types of sales. The Cox-Wyden internet tax ban is currently set to expire in 2007. "The Internet Tax Freedom law has created a level playing field, stopping unfair and discriminatory tax schemes that would wall off the Internet to many Oregon consumers and make e-commerce impossible for Oregon business owners," said Wyden. "Internet users and entrepreneurs who breathed a sigh of relief at this law's extension should have the security of knowing its protections will never go away." The Internet Tax Freedom Act was renewed and extended in late 2004 by the Internet Tax Non-Discrimination Act. In that legislation, a number of changes were made to address recent technological advances - including the clarification of the definition of Internet access to ensure that the moratorium applies consistently, ensuring that the law would not affect taxation of voice telecommunications services (including voice-over internet protocol, or VOIP), and protecting other Federal, State and local regulatory fees already collected to preserve and advance the universal service program and that are not purchased or used directly to provide Internet access. The extension also provided limited grandfather periods for states that already taxed Internet access in 1998, and for those who currently tax high speed wireline and wireless Internet access (including those that tax the so-called "last mile"). The extension also incorporated accounting rules to address bundling, an explicit conclusion of non-transactional taxes from the Internet tax moratorium, and savings clauses addressing the regulation of Internet access, universal service and E-911. Wyden has long been one of the Senate's leading advocates of consumer rights and protection in conjunction with responsible technology growth.