Feeds

Senators propose permanent ban on internet sales and access tax

Except for your local collector of course

The Essential Guide to IT Transformation

Two members of the Senate Commerce Committee have introduced a mini-bill that would permanently block both taxes on internet access and "multiple and discriminatory taxes" against e-commerce.

"E-commerce is thriving largely because the internet is free from burdensome tax restrictions. Unfortunately, tax collectors see it as a new revenue source, and they must be stopped," said co-sponsor Kelly Ayotte (R-NH). "This legislation will provide certainty to the marketplace, helping the Internet continue to be a driving force for jobs and growth."

The Permanent Internet Tax Freedom Act (S. 31), which Ayotte proposed with Senator Dean Heller (R-NV), is a marvel of brevity. It simply amends one clause to the current 1998 Internet Tax Freedom Act by replacing the phrase "taxes during the period beginning November 1, 2003, and ending November 1, 2014" with just the word "taxes."

The net effect for the e-commerce industry if the bill passes is that everything stays the same. States can levy sales taxes on goods bought online, but not add extra charges for inter-state traffic. State sales taxes can still be applied however, where they have been enacted.

Such taxes are currently in place in states like New York and California, and while Amazon and others fought hard against them, the e-commerce lobby now seems to have accepted that it can't be tax-free. Local sales taxes aren't too high a price to pay, considering the disadvantages faced by the competition.

Physical stores are limited by stock and distance, maintaining a physical presence, and paying staff to work in a shop people actually want to visit. Long-term staff are also valued, because they both know where things are and can advise people, as well.

E-commerce vendors still get to use cheaper, casual labor in low-regulation states, well away from any expensive commercial properties, and can run a work atmosphere not conducive to civilized shopping. Shipping adds additional costs, but the savings more than make up for it.

The other benefit of the bill is maintaining the untaxed status of internet access and it's a nice fillip for all users. Since the bill proposes no new taxes of any kind, it might actually get Republican support and have a shot at getting passed, if the Democrats agree. Mind you, with the way American politics is these days, nothing is certain.

"Every American should be able to access the internet without penalties from the federal government," said Senator Dean Heller. "The Internet Tax Freedom Act will ensure a long-standing federal policy that prevents the government from raising taxes, and preserves the Internet as a tool for education and innovation." ®

Eight steps to building an HP BladeSystem

More from The Register

next story
ONE EMAIL costs mining company $300 MEEELION
Environmental activist walks free after hoax sent share price over a cliff
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Arrr: Freetard-bothering Digital Economy Act tied up, thrown in the hold
Ministry of Fun confirms: Yes, we're busy doing nothing
UK.gov's Open Source switch WON'T get rid of Microsoft, y'know
What do you mean, we've ditched Redmond in favour of IBM?!
Help yourself to anyone's photos FOR FREE, suggests UK.gov
Copyright law reforms will keep m'learned friends busy
Putin: Crack Tor for me and I'll make you a MILLIONAIRE
Russian Interior Ministry offers big pile o' roubles for busting pro-privacy browser
Apple smacked with privacy sueball over Location Services
Class action launched on behalf of 100 million iPhone owners
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.