Crunch time for Congress on Internet taxes

The looming fall budget battle in which abortion politics and the Iran nuclear deal will take center stage, serves as a friendly reminder to even the most veteran Washington politicos: governing is complicated and difficult. With all of the benefits of a true democracy – one where New Hampshire residents enjoy the same representation as New Yorkers – come serious challenges. Optimism soared among the Republicans following the 2014 elections, when both Chambers came under Republican control. However, the reality of our country’s many challenges are now squarely confronting House Speaker John Boehner (Ohio), Senate Majority Leader Mitch McConnell (Ky.) and their diverse GOP membership.  

Yet areas for positive and productive action still exist, and it is my sincere hope that Congress – especially Republicans – do what they can to protect the American public from the pitfalls and dire consequences of gridlock and potential Government shut down. Perhaps nowhere is this danger more true than passing at least a temporary bill, and hopefully a permanent one, that would ban State and local taxation of Internet access.

{mosads}Well before the August recess, the House of Representatives unanimously passed the Internet Tax Freedom Act (ITFA), which bans any Internet access taxes by State and local governments. Passed initially in 1998 to help drive Internet adoption and deployment, and to reduce costs, ITFA has been extended a handful of times since – including December 2014 – with broad bipartisan support, including from the President.

The 2015 measure would write the tax ban into law permanently – an extremely positive move that would forever fend off the more than 10,000 different State and local taxing jurisdictions which are now seeking new revenue. Communications services are highly taxed compared to most goods and services – 17 percent on voice services and 12 percent on cable on average – and tend to place an unfair burden on lower income users whom are least able to afford them. These services, which the Wall Street Journal just dubbed “some of the fastest-growing bills in household budgets,” are thus ripe targets for State and local tax zealots.

Yet the Senate has been totally silent on its plans for the legislation, even with less than 15 days until the current legislation – with only a temporary ban – expires. Some believe this is due to a totally separate piece of legislation known as the Marketplace Fairness Act (MFA), which would allow State governments to collect sales taxes from out-of-state retailers that have no physical presence in their States.

Some optimists in Washington’s telecommunications circles assume that the ban on Internet access taxes will find its way into September’s omnibus budget funding measure. But why does the passage of such a nonpartisan and common sense measure have to be dependent to such a great degree on outside factors? In short – it doesn’t and shouldn’t. There is simply too much at stake for U.S. consumers, who are already dealing with extensive add-on fees to both wired and wireless service bills, to risk the expiration of ITFA next month.

While ITFA may not garner the highly politicized and polarizing headlines that Planned Parenthood or the Iran deal does, this is a vitally important issue. American voters are directly affected and must tell their elected representatives to keep the Internet free from taxes of any kind. As the Las Vegas Review Journal editorial board recently concluded, “If Washington, states and localities were able to tax Internet service the same way they tax cellphone plans [sic], families and small businesses would notice the hit to their finances. Governments at every level have managed to continue growing despite their inability to tax Internet service for two decades. Why would we want them to start now?”

The House version has nearly 200 co-sponsors. The Senate bill – The Internet Tax Freedom Forever Act (ITFFA) – is co-sponsored by members such as conservative Tim Scott (R-S.C.) and liberal Chuck Schumer (D-N.Y.). This is no accident – it is a simple, straightforward, no hidden agenda, bipartisan piece of legislation. ITFA is supported by leadership and freshmen alike, and senators at opposite ends of the political spectrum. If it was brought to the Senate floor this month, it would pass overwhelmingly.

The clock is ominously ticking. Rather than allow this measure to fall victim to inaction because other issues are causing partisan gridlock, the Senate should do the right thing for their Internet-dependent constituents and pass the ban on Internet access taxes now. It’s high time for the elected leaders in both Houses to step forward and demonstrate leadership. After all, that’s why they were elected by their peers.

Coursen is founder of The Status Group. He formerly served as Majority Communications counsel for the Senate Commerce Committee and advised the Ronald Reagan and George H.W. Bush administrations.