Permanent Ban on ISP Tax Passes House Judiciary

The House Judiciary Committee has approved a bill that would make permanent the moratorium on Internet access taxes and multiple discriminatory online taxes.

The vote was 30 to 4 on the Permanent Internet Tax Freedom Act (HR 3086), and followed the defeat of an amendment proposed by ranking member John Conyers (D-MI), that would have simply extended the moratorium another four years, and removed a provision eliminating the grandfathered taxes of seven states who had those access taxes in place before the 1998 passage of the initial moratorium.

Several Democrats argued that a permanent ban was favoring the broadband sector, was a violation of states' rights, and did not allow Congress the flexibility to review the ban periodically to see if it was still necessarily, given that it was passed when the Internet was a fledgling. They also pointed out that removing the grandfather clause could mean hundreds of millions of lost revenues in those seven states -- including over $300 million in Texas alone -- which would mean states would turn elsewhere for the money, impacting other sectors.

Bill backers countered that the grandfather clause had been a way to give those states time to transition to other sources of revenue, and they had had 16 years to do so. Committee Chairman Bob Goodlatte (R-VA), argued that the Internet’s ubiquity was even more reason to insure that an ISP tax did not threaten its continued growth and prosperity.