Internet Tax Freedom Act: Extended to September 30, 2016

While there had been high hopes that the Internet Tax Freedom Act (ITFA) would finally be made permanent, we are left with yet another temporary extension.  CompTIA had supported making this legislation permanent as provided by the Permanent Internet Tax Freedom Act (PITFA) passed by the House last June. 

PITFA gained new momentum this month when it was added to the trade customs conference report.  With PITFA riding on the trade customs bill, most had anticipated that it would finally be enacted. 

However, objections to PITFA were raised in the Senate by those who supported packaging PITFA with a less popular provision, the Marketplace Fairness Act (MFA). The MFA would allow states to enforce collection and compliance onto out of state businesses that sell goods or provide services into the taxing state.  Had a point of order been raised against PITFA, it would have required 60 votes to overcome the objection.  This uncertainty prompted Majority Leader McConnell to postpone consideration of the trade legislation into 2016; the reasoning was that the Senate did not have adquate time to address a point of order that could strip PITFA from the trade customs conference report. 

While only temporary, we welcome this temporary extension of the ITFA.  We look forward to working with Congress in the coming months in an effort to permanently extend this ban in order to avoid future tax and compliance uncertainty for both internet service providers and internet users.