Eshoo Bill to Permanently End Internet Access Tax Signed Into Law

WASHINGTON, D.C.—Congresswoman Anna G. Eshoo (D-Calif.), Ranking Member of the Communications and Technology Subcommittee, released the following statement after the President signed into law bipartisan legislation to place a permanent moratorium on Internet access taxes paid by consumers (not to be confused with online sales tax legislation). Eshoo was the lead House Democrat of the Permanent Internet Tax Freedom Act (H.R. 235) and has championed the legislation since 1997. It was included in a reauthorization of the U.S. Customs and Border Protection passed by Congress on February 11th and signed into law today, February 24th. Temporary moratoriums have been put into place by Congress since 1998 to encourage growth of online commerce. Prior to this, Internet access taxes were imposed by some states and localities to generate revenue.

“The Internet is a tremendous economic engine for our country,” said Eshoo. “To tax millions of Americans just to access the Internet would stifle the countless benefits and opportunities the Internet offers, including access to health care, education, commerce and communications tools. This law will ensure that Americans can permanently access all the powerful resources of the Internet, tax free.”

Why is a permanent moratorium so important?

• In June of 2015, the Government Accountability Office (GAO) released a report which found that broadband affordability continues to be the most frequently identified barrier to adoption.

• According to a study by the Phoenix Center, an average tax rate of 2.5 percent on broadband could reduce subscribership by up to 15 million people.
• H.R. 235 provides certainty to the entire Internet community that access to the Internet will remain tax free.
• With the expiration of the temporary tax moratorium, taxation on Internet access by over 10,000 state and local taxing jurisdictions would become likely.

Eshoo concluded: “At a time when affordability continues to be a key barrier to widespread broadband adoption, this bill bolsters our national commitment to universal broadband in America.”

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