Norquist: Don’t tax the Net

Americans for Tax Reform head Grover Norquist wants House lawmakers to permanently ban any tax on companies providing Internet service.

In a letter to leaders of the House Judiciary Committee on Wednesday, Norquist said that a current bill in Congress would prevent “punitive and discriminatory” taxes from limiting the power of the Web.

{mosads}“Excessive taxes will hinder continued growth in the digital space,” he wrote.

“Allowing the Internet access tax moratorium to lapse would certainly lead to higher tax rates on consumers and reduce the rate of adoption and innovation. The Internet is our greatest gateway to innovation and education, higher taxes on Internet access undermines American economic competiveness and growth.”

The Permanent Internet Tax Freedom Act would ban state and local governments from enacting taxes on Internet service. Unless it is passed this year, a 1998 law temporarily prohibiting the taxes would lapse, clearing the way for governments who might be eyeing taxes on Internet service companies as a way to fill their coffers.  

The bill has a won over 204 members of the House since it was introduced last autumn, but it has yet to make it out of the Judiciary Committee.  

In his letter on Wednesday, Norquist warned lawmakers not to combine it with an Internet sales tax bill in order to advance it to the House floor.  

Combining it with the Marketplace Fairness Act is “untenable,” the anti-tax advocate wrote.

He called the sales tax bill the “antithesis” of the Permanent Internet Tax Freedom Act since it would “dramatically expand the power of state governments and auditors to reach across their borders to tax citizens who have no recourse.”