Policy Documents

The Case for Tax-Free Internet Access: A Primer on the Internet Tax Freedom Act

Daniel Castro –
June 1, 2007

The Internet Tax Freedom Act (ITFA) has reduced the cost of Internet access, spurred investment in the digital economy, and contributed to nine years of economic growth. However, the ITFA will expire in November 2007 unless Congress takes action. This report explains why Congress should make the current moratorium permanent and eliminate the grandfather clause which allows some states to tax Internet access at the expense of the nation as a whole. The report discusses the legislative history of the ITFA and the national benefits of tax free Internet access. Finally, the report reviews the objections cited by opponents of the moratorium and explain why these objections are unfounded.