The Senate recently approved a measure authored by U.S. Sen. Steve Daines (R-MT) that would permanently prohibit local and state taxes on Internet access.
The Senate approved Daines’ bipartisan Internet Tax Freedom Forever Act as part of the larger Trade Facilitation and Trade Enforcement Act, H.R. 644. The measure would permanently extend the current moratorium on local and state taxes on Internet access.
“The Internet is a critical avenue for Montana businesses to compete in the global marketplace and serves as a gateway for economic opportunity,” Daines, a member of the Senate Commerce Committee, said. “This permanent ban on taxing the Internet protects small businesses and hardworking families from senseless new costs and ensures that the Internet will remain an strong engine of innovation and growth.”
Cost is the biggest barrier to consumers using broadband services to connect to the Internet, according to the National Broadband Plan. Keeping Internet access affordable and available leads to more access to jobs, education, healthcare and entrepreneurship.
In Montana, Daines’ home state, an automatic 3.75 percent tax would be applied to Internet access if the current federal moratorium were lifted.
Riley Johnson, the Montana state director of the National Federation of Independent Businesses, said tax-free Internet access drives economic development in rural areas in particular.
“Small business owners are increasingly reliant on the Internet and that’s especially true in rural areas – like Montana – where electronic commerce delivers more products and creates more opportunities than ever,” Johnson said. “Taxing it would obviously raise costs for small businesses that buy on the Internet and reduce sales for small businesses that sell on the Internet.”