Internet Tax Freedom Act
Encyclopedia
The 1998 Internet Tax Freedom Act was a United States
law authored by Representative
Christopher Cox and Senator
Ron Wyden
, and signed into law on October 21, 1998 by President
Bill Clinton
in an effort to promote and preserve the commercial, educational, and informational potential of the Internet. This law bars federal, state and local governments from taxing Internet
access and from imposing discriminatory Internet-only taxes
such as bit taxes, bandwidth taxes, and email taxes. The law also bars multiple taxes on electronic commerce
.
It does not exempt sales made on the Internet from taxation, as these may be taxed at the same state and local sales tax rate as non-Internet sales, just like mail order sales. The Act did not repeal any state sales or use tax.
It has been thrice extended by the United States Congress
since its original enactment. The most recent extension was titled the Internet Tax Freedom Act Amendment Act of 2007
, signed into law on November 1, 2007, by George W. Bush
and extended the moratorium until November 1, 2014.
The 1998 law also authorized establishment of a study commission to study national tax policy with regard to the Internet. The Advisory Commission on Electronic Commerce studied the issue from 1999 to 2000. The Commission was chaired by then-Virginia Governor James S. Gilmore, III, who led a majority coalition on the Commission to issue a final report opposing taxation of the Internet and eliminating the federal excise tax on telecommunications services, among other ideas.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
law authored by Representative
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...
Christopher Cox and Senator
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
Ron Wyden
Ron Wyden
Ronald Lee "Ron" Wyden is the senior U.S. Senator for Oregon, serving since 1996, and a member of the Democratic Party. He previously served in the United States House of Representatives from 1981 to 1996....
, and signed into law on October 21, 1998 by President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
in an effort to promote and preserve the commercial, educational, and informational potential of the Internet. This law bars federal, state and local governments from taxing Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
access and from imposing discriminatory Internet-only taxes
Internet taxes
From the inception of the Internet until the late 1990s, the Internet was free of regulation by government in the United States at all levels, and also free of any specially targeted tax levies, duties, imposts, or license fees. By 1996, however, that began to change, as several U.S...
such as bit taxes, bandwidth taxes, and email taxes. The law also bars multiple taxes on electronic commerce
Electronic commerce
Electronic commerce, commonly known as e-commerce, eCommerce or e-comm, refers to the buying and selling of products or services over electronic systems such as the Internet and other computer networks. However, the term may refer to more than just buying and selling products online...
.
It does not exempt sales made on the Internet from taxation, as these may be taxed at the same state and local sales tax rate as non-Internet sales, just like mail order sales. The Act did not repeal any state sales or use tax.
It has been thrice extended by the United States Congress
United States Congress
The United States Congress is the bicameral legislature of the federal government of the United States, consisting of the Senate and the House of Representatives. The Congress meets in the United States Capitol in Washington, D.C....
since its original enactment. The most recent extension was titled the Internet Tax Freedom Act Amendment Act of 2007
Internet Tax Nondiscrimination Act
The Internet Tax Nondiscrimination Act, , is the current U.S. federal law that bans Internet taxes in the United States. Signed into law on December 3, 2004, by George W. Bush, it extended until 2007 the then-current moratorium on new and discriminatory taxes on the Internet...
, signed into law on November 1, 2007, by George W. Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
and extended the moratorium until November 1, 2014.
The 1998 law also authorized establishment of a study commission to study national tax policy with regard to the Internet. The Advisory Commission on Electronic Commerce studied the issue from 1999 to 2000. The Commission was chaired by then-Virginia Governor James S. Gilmore, III, who led a majority coalition on the Commission to issue a final report opposing taxation of the Internet and eliminating the federal excise tax on telecommunications services, among other ideas.