Should Internet Access Remain Tax Free?

    August 20, 2013
    Zach Walton
    Comments are off for this post.

You probably pay a lot for Internet, but at least you don’t have to pay taxes on your service with each monthly bill. That may all change next year, and two senators want to stop that from happening.

The Hill reports that Sens. Ron Wyden and John Thune introduced the Internet Tax Freedom Forever Act into the Senate on Thursday. The bill would prevent state and local governments from imposing taxes on Internet service. In other words, the taxes that you see on your monthly utility bills would not appear on your Internet bills.

Do you think the Internet should remain tax free? Is there any benefit to taxing Internet service? Let us know in the comments.

The Internet Tax Freedom Act is nothing new. In fact, the bill was originally authored by Wyden all the way back in 1998. It barred the above federal, state and local taxes on Internet access, but it also barred said governments from imposing such things as a bit tax or a bandwidth tax. Such taxes were bad in 1998, and would be absolutely disastrous in today’s age of constant bandwidth consumption.

The government has three times now recognized that the Internet should be kept tax exempt. The most recent extension – the Internet Tax Freedom Amendment Act of 2007 – will expire on November 1, 2014. Wyden and friends hope to place a permanent ban on Internet service taxes by that time.

In defending the permanent tax exemption, Wyden says that it’s needed to facilitate the innovation and job growth that Internet brings:

“As the Internet Tax Freedom Act enabled and promoted Internet access and adoption across America, the Internet became a platform to facilitate global commerce, sparking nothing short of an economic revolution. It facilitated the development and growth of the digital economy and has created new industries and the good-paying jobs that come along with them. “Consumers, entrepreneurs, and innovators can breathe easy knowing that a permanent extension of ITFA is on its way.”

Wyden’s co-sponsor, Thune, said that the legislation would even help promote Internet access in rural areas that are still sorely lacking broadband Internet access:

“Use of Internet technology is one of the key drivers of economic growth, innovation, and information in our 21st century economy. Keeping the Internet accessible to consumers encourages innovation and investment in our global economy. Our legislation would make permanent the prohibition on Internet access taxes, would prevent multiple and discriminatory taxes on Internet commerce, and would promote Internet access throughout the country, which is especially important in rural areas of South Dakota.”

Interestingly enough, Wyden and Thune’s bill would go above and beyond what the current Internet Tax Freedom Act does. It would ban multiple and discriminatory taxes from being applied to digital items. The bill currently bans multiple taxes on the sale of digital goods, but there’s no law against discriminatory taxes on digital goods. If passed, you would no longer have to pay any taxes when buying digital songs, movies and apps.

As you would expect, the bill has already received tons of support from the wireless and Internet provider industries. In fact, CTIA President and CEO Steve Largent said that a permanent moratorium on Internet taxes is needed to preserve the current “affordability” of wireless and wired Internet:

“An affordable internet is vital to millions of American consumers and businesses, and Senators Wyden and Thune remain at the forefront of preserving this critical access to opportunity and information by introducing the Internet Tax Freedom Forever Act of 2013. Wireless broadband was in its infancy when Congress passed the Internet Tax Freedom Act fifteen years ago and put the first temporary tax moratorium in place. Today, millions of Americans rely on wireless technology for myriad purposes in their everyday lives, and it’s more important than ever to create a reasonable and permanent tax process on internet access. CTIA and its members look forward to working with Senators Wyden and Thune on behalf of all American internet users to ensure Congress will act on this important legislation before the current moratorium expires next year.”

In the wake of the bill being announced, a number of trade groups and companies have joined forces to create the Internet Tax Freedom Act Coalition. The group is made of the usual suspects, including Amazon.com, AT&T, Comcast, Time Warner Cable, T-Mobile, Verizon and others. All of these companies have plenty to gain with the passage of this bill, and it’s unsurprising to see them voice support for it.

Unlike some issues that telecoms and wireless carriers push for, consumers would actually benefit from the passage of this bill as well. We may be paying a lot for Internet and wireless service, but we would paying a lot more if stuff like the bandwidth tax was enacted. The ban of multiple and discriminatory taxes will probably be a point of contention with traditional retailers, but I think everybody can agree that Internet access taxes are no good.

Do you support the permanent extension of the Internet Tax Freedom Act? Or should state and local governments be allowed to tax the Internet? Let us know in the comments.

  • Name

    So now, I will have to pay to be spied on? Absolutely not. We should not be taxed.

  • John

    No way – The internet MUST remain tax fee. Stand together everyone.

  • http://trinaschiller.ws Trina Sonnenberg

    I’m already paying taxes on my Internet service. My local phone company is the only provider for the area and they add the Internet service to the phone bill and tax the total for local phone and DSL. Bust up small town monopolies.

  • Ike

    There should be NO taxes on Internet usage!!!

    Point Blank!!!

  • chuck

    NO, taxes will only deter access to the internet, thereby dumbing down the populance and creating more government control

  • http://timberhillsantiques.com Russell Weiss

    No. In therory, taxes are levied in order to provided services or funding for local, state or federal programs. What benefit will internet sellers OR buyers receive from taxing when they are across the country? What next…sales tax on shipping with the USPS???

  • https://plus.google.com/u/0/116911425699075691818/posts Whitney

    I fully support the permanent extension of the Internet Tax Freedom Act. State and local governments need to find other ways to generate revenue for their states and cities. I also agree to NOT taxing digital items. What… we pay for, we download then we pay the government for that right? No, they have enough fingers in our pockets already.

  • http://www.moxygirlmall.com Teresa bacon

    I think the Internet should remain tax free! We already pay enough taxes as it is!

  • http://thanksforthememories2.webs.com Theresa

    While I agree with most of the comments, and we do pay way too much tax in the US, paying/collecting sales tax on items via the internet is only fair. If you were to purchase the item at the store front you would be required to pay the sales tax for that particular state. My big concern is charging the sale tax for each appropriate state. In my humble opinion this would be a nightmare for us small internet business. I for one do not want to know or do the paperwork for each states tax collection. I do not mind collecting the tax for the state which I actually reside. If the government insists on collecting sale tax on internet sales, then have each internet sale business pay/collect sales tax according to their state regulation and rate. This would alleviate the sale tax filing nightmare.
    Thank you

    • http://thanksforthememories2.webs.com Theresa

      Sorry, I made the wrong comments… I neglected to read the article entirely. This is about taxing internet, not charging sale tax for online purchases. SORRY everyone.

  • Allen

    The have enough money to waste as it is. No taxes as we are all taxed to death as it is. Our government needs to learn how to budget our money that the spend as if the have and unlimited supply.

  • James Ryan

    Isn’t there one area or service in which the S.O.B government won’t try to tax us!!?? As if we don’t gouge us enough for internet service already! We should definitely NOT be taxed for our internet service in any way, shape or form…..EVER!

    • James

      sorry, in my earlier comment I meant “as if we don’t get gouged enough for internet service already”!

  • http://www Cedric Rice

    The government already gets more of our money than it deserves…maybe they should focus more on functioning efficiently for the American people rather than rippping us off at every opportunity..

  • http://www.perfect8.co.uk Jackie Mackay

    Zach’s article and some of the comments show a frighteningly naive approach to TAX and to the very short history of the Internet. (are you a part of the government Zach?)

    On the first issue the Net IS taxed. Indirect taxes are abundant. Whatever they say about to tax or not to tax is just to give pompous and conceited idiots of politicians something to do and say so their parasitism is not QUITE so obvious. To distract the public for a while while the military and governments go right ahead and spend whatever they can get on whatever they like. The taxman takes a fair % of pretty much every bit of service and product in the long chain of events leading to sending an email.

    Moreover the major corporations use the Net to spam and manipulate with advertisements and generally make the Net more and more like a series of sheep pens (like fcbk) to herd and control the people who they fleece. The net – thanks to Google is just like one big billboard of ads that blocks out much of the light of truth…. and more. Communication and knowledge is already massively taxed.

    If you don’t believe this – go Google it 😉 Seriously though the press has much to answer for in spreading ignorance as if it were the truth. Misinformation disinformation, lies ignorance waffledeblah is only so possible to spread because most people are, by now, conditioned that money is EVERYTHING and that we must unconditionally obey anyone who claims to be an authority – first by believing that they have a sufficient quantity to be authorities in the first place. Yet when you dig deeper and question the facts and opinions you will eventually find that all responsibility for taking a decision like “taxing the Internet” has been assigned by the government to faceless experts who have NO authority at ALL.

    Sorry Zach – and thousands of bloggers like you – we are all in the same boat and all the responsibility for this and thousands of other decisions is actually the responsibility of the PEOPLE.

    The other alarming thing is that people ALL ASSUME authority of the US (or any other) government) just like we assume they own the airwaves and – well pretty much everything. THEY only ‘own everything because we believe they have the authority to own. THEY DO NOT.

    It’s not like it was – everybody saying “see this – see that – WAKE UP”. No we all saw it yesterday and now take conscious choices to watch TV, follow trends and eat hormone filled junk foods from brutalised animals and poisoned earth then run to the DOCTOR!!! and let the government dictate to them and us about OUR health. (WHAT?).

    My point is – don’t stop there – keep on observing keep on finding out more. It’s not Zach’s fault – he was told by someone else that the govt CAN tax the internet. ANY man or woman who knows how it all works can see a bit of cotton candy the size of the white house and the houses of parliament being offered for consumption.

    AND don’t forget to enjoy the life we have got and music, dance, our family, art, scenery and the list is endless. Don’t let the TV or the Net steal our soul…. look the sun is shining what are we doing in front of another screen for so long? (dayam).


    • http://www.Self-to-self.comandFacebookpageMysticalVerses... Ruth Cunningham

      Indeed, the first point is that the “government” does not own the internet–where would they get any imagined “authority” to tax what is not theirs to begin with… as in taxing our (individual people’s) goods & services; taxing (code for stealing-through-domination-fear tactics) “our” right to exchange personal goods and service that belong to the individual as the time that belongs to the individual… — This is the very activity that organized crime is about. Insanity designed and perpetuated through invisible premises, as manipulations meant to hide megalomaniac, brute force mentality…

  • Matt

    Tax the internet? Did you know that income tax was only meant to be temporary? Its not the public’s fault that criminals have been robbing the taxpayers and squandering their money for the last 100 years and even more so now!

  • http://www.askbobm.com Bob Marconi

    * Tax Free Defiantly * The more you give THEM the more they take. And all we’ve gotten in return for years is completely dis-functional government, both federal, state and local!

    Remember: Only one person can effect change – look in the mirror and she/he will be revealed…

    Thanks for listening

  • http://www.dreamhelmet.com Joe

    The best things in life are free! If they could find a way to tax the air I believe they would do it. Considering some of the things the government has done with our taxes, I think it is better if the money is left in the hands of the citizens.

  • https://www.coffeebeanblog.com Louis

    The Internet should remain tax free! We already pay enough taxes as it is! The internet MUST remain tax FREE!

  • Bridget

    Freedom of information! Tax free freedom of information. It’s just the government wanting a piece of the pie, NO, tax should not be added to the bill, we are taxed to the hilt already, let us have this freedom free of tax.

  • Norman

    Another tax, another way to limit who uses the web. All to prevent knowledge to flow freely. After all, an informed public, is a dangerous public to those who hide behind the fallacy of: “you can trust your government to do the right thing” P.R./B.S. that we are inundated with on a daily basis by those who have fears that what they are doing is illegal and against the best interests of the public. Radical surgery is needed to remove the cancer of corruption this government has allowed to become.

  • Shelley

    Absolutely NO Taxes!!!!
    Having free public access to the Internet is critical to keeping everyone informed. It’s bad enough that we have to pay wifi fees. Too bad wifi fees couldn’t be paid for out of other taxes they collect. Every town city or county should have free wifi connections, just so we get back something from the taxes we pay. How about that???

  • Greg

    So if it is taxed does that mean everyone gets it for free and all the telco’s get pushed to the side and equipment is allocated properly so that everyone gets blinding fast speed unless you send junk mail?

  • Bob

    We need real tax reform where every tax dollar is specifically itemized directly to the government spending. That way we can stopped being fooled into voting for more taxes on ourselves. If they want to tax internet usage they need to be accountable to what benefit we receive. If we decide we don’t need the benefit, then we don’t need the tax. Every tax dollar needs that level of transparency.

  • tenjake

    it should be free and remain tax free everyone is already being taxed like crazy they need to quit trying to tax this free of tax is best

  • http://Plug55 Richard Grady

    The internet should remain free of taxes, and we voters should agree to vote against ANY politician who seeks to tax it.

  • http://Plug55 Richard Grady

    There should be no taxes on the internet, and ANY politician who seeks to impose taxes on it we voters must vote them out of whatever office they occupy.

  • James Cousineau

    Definitely should NOT be taxed. The Internet is the global method for all people, no matter what country they are in, no matter what their political freedom is, to communicate. This has changed the face of human interaction. This no border, non-political, way to communicate has made us all as one country for freedom of speech … Planet Earth. To tax that freedom would be political interference and I am sure would lead us all further down the path of the Big Brother syndrome, and closer to George Orwell’s 1984. Politicians are seeking more ways to get blood from a stone.

  • http://trustedeblogs.com Ivan Labbe

    The Internet is the people’s power, it brings down bad government and supports good causes, it makes instant news such as disasters and war known to the world instantly. It let’s a poor person have the same power as a rich person as long as he can have access. If the government is allowed to tax your internet services , I can see how, over time they will use this power to manipulate who can have access and who can’t. Generally it always comes down to the poor people the less educated people the one’s with the wrong religion and so on. Give the government the power to tax the Internet and you give the government absolute power to control you and everyone else. NO ABSOLUTELY NOT –the Internet must remain tax free at all cost, complete affordability of expression is the only thing money and power can’t control YET! I certain that in due course, they will find another way to limit the power of the people, but for now at least we need to prevent any one from taxing our freedom.

  • http://www.sahiwal.biz M Sohail

    No tax. There are already so many taxes that we can hardly breathe.

  • http://www.manoharbhatia.blogspot.com Manohar Bhatia

    In order to increase trade and e-commerce, internet access must be made permanantly {tax free}.If this noble service is taxed, it may open up a can of deadly worms, for which there will be no cure.
    Manohar Bhatia.

  • http://slideshowinteraction.zxq.net Peter

    Who would pay the tax. If it was imposed on the end user then this would just make bills even higher for those who would be less able to pay. With initiatives by Microsoft and Raspberry Pi to buy a cheap PC to encourage programming would be hampered. This is just another means to ensure that those who are least able to afford the internet and its advantages such as education will be locked out. It ensures the well paid job market has minimal competition in the jobs market for those who have paid out for private education or gone on to Universities such as Harvard, Yale, Oxford, Cambridge, etc.

  • Mark

    No taxation on Internet Access, it will strangle innovation and communication. As for taxes in general, in the USA we are not getting value for the taxes we already pay.

  • http://venturearete.org/ResearchProjects/ProfessorGurr/ Henry Gurr

    YES INDEED!! I support the permanent extension of the Internet Tax Freedom Act!!

    And THUS:
    National, State and local governments be NOT be allowed to tax the Internet!!

  • John

    Why take it, they will just keep overspending if they have more money or just give it away to other countries. There is plenty of tax money to take care of all of America’s problems, whoever says there isn’t enough money should be fired and replaced with someone who does know how to manage money.

    It’s totally ridiculous to keep raising taxes when there is plenty of money already.

  • http://www.paymentway.com.ua Sava

    I think that the Internet service should be kept tax exempt.

  • Wayne Seely

    They should NOT tax the internet, but it doesn’t matter what we say since we aren’t in control anyway. We have the VOTE for our representation, but they can never make the tough decisions. If you haven’t got it don’t spend it. It’s that simple. We’re all supposed to be grownups here!

  • Randy

    NO! NO! NO! Somewhere we have to draw the line! Adding more taxes to the consumer is NOT going to solve the problems that our government has created!

  • WI charges tax

    Wisconsin ISPs collect state sales tax on Internet access it sells to business and residential end users no different than the sales tax charged on many other goods and services. It is considered a telecommunications service and I feel it is fair. Bit tax and these other taxes mentioned would be going too far…

    • Jon

      But a “bit tax” will be the ultimate goal once the first hurdle is jumped over. Especially within states that aren’t doing too well budget-wise.

  • Lynne Salomon Miceli

    Keep the Internet tax exempt.

  • http://www.cozywebdesigns.com Leo @ Cozy Web Designs

    There are so many other things that are already being taxed and internet should not become one of them. Any government official worth their weight in gold should already understand this and fight for that right.

  • http://www.springfieldcolorado.com Gloria Jean

    I ALREADY PAY TAXES ON THE SERVICE. What else are they going to charge me for?
    Viaero Wireless in Colorado: State sales tax: $2.12 City sales tax: $1.47, Universal Service Fund (whatever that is) $1.78, Federal Universal Service Fund: .30. (??) Total: 8.07 taxes.

  • http://www.ETproductions.com/ James Hollomon

    I’m not an anti-tax campaigner. I realize we need to fund education, infrastructure, security, research and such to expect a brighter future. But I am very opposed to regressive taxes and strongly opposed to bone-headed taxes that cut into the reach of the very things we need to help our nation stay fiscally strong. Taxing the internet would be a bad idea for both those reasons.

  • http://www.lapidaryjewelers.com Don Kirckof

    As a brick and mortar retailer I feel we should all be playing on a Fair field!!! Not to mention that the quality of goods, and lack of service customers usually receive when ordering over the internet, the Fact that they don’t have to pay sales tax is always brought up! What the customer does not realize is that they are suppose to pay USE tax in their State on any items sent from another State.
    I think that wherever an item is purchased from they should have to charge there States, or the recipients States Sales tax. Then we will all be playing on the same level, at least where the Sales Tax is concerned!!!

    • Jon

      I don’t think you actually read the article…

  • http://imagesnorth.com, lesley Leonhardt

    The internet cannot and should not be taxed in any way at all. If a tax is levied it will only go up and up over the years. Politicians cannot help themselves when it comes to taxes. We are overtaxed in many ways and the internet should not be one of the ways politicians reach into our pockets to make themselves even wealthier.
    Sales taxes should be collected on goods sold in every state with no exceptions making it a fairer playing ground for bricks and mortar businesses who have been carrying the sales tax load for years now and the results are in – states lost bundles of tax $$$ while Amazon got richer and richer and others like them.
    Fair is fair or aren’t we a democratic country any longer??

  • Allen Reed

    No I don not think we should pay taxes on our internet service as the internet is vital to our economy and they are making money everytime we buy something on the internet which i am sure is alot more that if we didn’t have internet service.

  • http://southerncharmbb.com Kay Pender

    Small business owners struggle to keep their businesses above water and more taxes are not needed.

  • Robin

    No, I don’t believe we should be paying taxes on internet. The government has taken control of so many things already. They should be working for us not against us, which is what I think they do most of the time. They need to be concerned about more important issues than hassling the people who pay their salary and do something for the little guys for a change.

  • steve

    while i do not have a problem not taxing the service, we need to immediately allow states to add sales tax to all internet sales … it is only fair to the brick and mortar companies

  • wmaster

    yes. internet must be free!


    Politicians are greedy no-hopers that will try to rip your money off your and would take your clothes if you let them – so no tax on the internet – enough is enough!!