Statement of Congresswoman Lofgren Regarding the Internet Tax Nondiscrimination Act

Media Contact: Christine Glunz, 202.225.3072

Washington, DC – Today, U.S. Representative Zoe Lofgren (D-San Jose) issued the following statement regarding the Internet Tax Nondiscrimination Act, H.R. 49.  o:p>

“Earlier this year, I introduced H.R. 1481, which would have extended the Internet tax moratorium for another 5 years.  I introduced a 5-year extension because at the time, I believed that politically, it was the longest extension that we could get.  But I am now convinced that we must make every effort to extend the moratorium permanently.  That’s why I am a strong supporter and cosponsor of H.R. 49.

“Let’s be clear on what H.R. 49 does and does not do.  It prohibits states from taxing people for simply logging onto the Internet.  This is absolutely essential to the growth of the Internet.  It is also important because access taxes hit those with lower incomes the hardest.  We need to find ways to bridge the digital divide in this country, not make it harder for lower income Americans to get online.     

“H.R. 49 also prohibits multiple and discriminatory taxes on Internet transactions.  This is simply a matter of fairness.  If I buy a CD on the Internet, it should not be taxed at a higher rate than if I buy that CD in a store.  There should be an even playing field.

“That’s what H.R. 49 does.  What it doesn’t do is affect the ability of a State to impose and collect sales taxes on Internet transactions.  Over the years, there has been a lot of confusion on this point.  Some have tried to link the moratorium with the sales tax issue.  But they are separate and distinct issues.  The ability of States to impose sales taxes is not limited by H.R. 49, it is limited by the Supreme Court’s Quill decision, which prevents taxes on remote sellers unless they have a “substantial nexus” to the taxing authority.

“We cannot risk harming the future of the Internet by conditioning an extension of the moratorium on resolution of the sales tax issue.  Let’s deal with the separate sales tax issue separately. 

“A toll to enter the information superhighway is not good policy today, and it won’t be good policy in a year, two years, or five years.  I urge my colleagues to support a permanent extension.” 

 

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