Internet Tax Freedom Act Passes House Judiciary Committee

(June 18, 1998)  The Internet Tax Freedom Act was approved by the House Judiciary Committee Wednesday on a voice vote, clearing the way for it to go to the full House.   The Senate has yet to take action on the bill.

The Internet Tax Freedom Act (ITFA) would impose a three year moratorium on new state and local discriminatory taxes on the Internet.  The Act would also create a commission to study the issue of Internet taxation, and report back to Congress.

The version which was passed was an amendment in the nature of a substitute to H.R. 3529.  Both the amendment, and the bill, were approved by voice vote.

Rep. Bob Goodlatte (R-VA) offered an amendment to limit the "grandfather clause" for jurisdictions which have already passed Internet taxes.  His amendment, which was adopted by a voice vote, would exclude cities and the District of Columbia from the Act's grandfather clause.

"We are one step closer to establishing a national policy against  taxing information," said Rep. Christopher Cox (R-CA), co-author of the Internet Tax Freedom Act with Sen. Ron Wyden (D-OR). "Thanks to bipartisan, bicameral, and Administration support for the Internet Tax Freedom Act, we will soon take the final step to prevent unfair and discriminatory taxes on the Internet. Judiciary Committee Chairman Henry Hyde and Chairman Thomas Bliley, whose Commerce Committee approved the Act 41-0 last month, are to be commended for their foresight in moving this bill forward."

The ITFA has been endorsed by several state governors, including  Pete Wilson (CA), George Bush (TX), George Pataki (NY), Paul Celluci (MA), and Jim Gilmore (VA).   However, many state and local officials, fearing loss of an opportunity to collect taxes, oppose the ITFA.