The Senate today passed, 72 to 20, a conference agreement for H.R. 644, the “Trade Facilitation and Trade Enforcement Act of 2015” that generally concerns trade and customs items. The legislation includes a provision that would make permanent the ban on states and localities taxing internet access or placing multiple and discriminatory taxes on internet commerce. The measure would allow grandfathered states and localities through June 2020 to phase-out existing taxes.
The conference agreement would be paid for by expanded customs user fees and increased penalties for a failure to file a tax return. Read text of the conference agreement.
The House on December 11, 2015, passed the conference agreement, 256 to 158. Therefore, with today’s action by the Senate, the legislation will be sent to the White House for action by the president.
First enacted in 1998, the “Internet Tax Freedom Act” was extended until December 11, 2015, as part of a continuing resolution to fund the federal government through December 11, 2015, as passed by Congress and signed by President Obama on September 30, 2015. The legislation prevented state and local governments from taxing internet access, or imposing multiple or discriminatory taxes on electronic commerce. States and localities that had imposed and enforced taxes on internet access prior to October 1, 1998, could continue to do so under “grandfather provisions." Seven states impose tax internet access.
The Protecting Americans from Tax Hikes Act (PATH Act) subsequently extended through October 1, 2016, the general ban on states and localities taxing internet access or placing multiple and discriminatory taxes on internet commerce.
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