News and Insights

Internet Tax Freedom Act Extended

Tax Development Sep 26, 2014

As part of the $1.1 trillion omnibus spending bill signed into law by President Obama on Tuesday, December 16, 2014, the Internet Tax Freedom Act (ITFA) was extended for another year. Due to expire earlier this month (December 11, 2014, and before that, November 1, 2014), ITFA bars state and local governments from imposing state and local taxes on Internet access and multiple or discriminatory taxes on electronic commerce. Although there had been a push to combine a version of the Marketplace Fairness Act (MFA) with the ITFA, MFA legislation was ultimately not included in the omnibus spending bill signed by the President.

The moratorium under ITFA began on October 1, 1998, but does not apply to state taxes on Internet access imposed prior to this date, as long as a state did not repeal its tax on Internet access more than 24 months before the enactment of P.L. 110-108. The driving legislative forces behind the measure, Senator Ron Wyden (D-Oregon) and Senator John Thune (R-South Dakota), say they intend to push for a permanent enactment of ITFA in 2015.


Jeremiah T. Lynch