With the stroke of President Obama’s pen, the Permanent Internet Tax Freedom Act (PITFA), which extends permanently the current federal moratorium against state and local taxes on Internet access, became the law of the land on Wednesday. The PITFA was adopted as part of the Trade Facilitation and Trade Enforcement Act (H.R. 644), which passed the Senate by a vote of 75-20 on February 11. As enacted, PIFTA permanently enforces the moratorium on Internet taxes that was originally adopted in 1998 and has been extended several times by Congress. Although seven “grandfathered” states that adopted Internet access taxes prior to 1998 have been exempt from the moratorium, the PIFTA sunsets the exemption in 2020 to prohibit Internet access taxes in these states effective that year.
House members approved H.R. 644 and its corresponding PITFA provisions in December. Senate action on the bill, however, was delayed as Senator Dick Durbin (D-IL) and other legislators from the grandfathered states pushed to combine the PIFTA with the pending Marketplace Fairness Act (MFA), which would permit states to impose sales taxes on goods purchased from out-of-state online retailers. Durbin and his supporters later agreed to drop that effort and allow a vote on H.R. 644 to proceed upon receiving assurances that the standalone version of the MFA would be voted on during the current Congressional session.
Welcoming Obama’s signature, House Judiciary Committee Chairman Bob Goodlatte (R-VA) said “I have worked for over a decade to make this permanent ban a reality, and I am pleased that this day has finally come.” Along the same vein, House Communications & Technology Subcommittee ranking member Anna Eshoo (D-CA) remarked that the new law not only ensures “that Americans can permanently access all of the powerful resources of the Internet” but also “bolsters our national commitment to universal broadband in America.”