Policy Documents

The Leaflet: The Permanent Internet Tax Freedom Act

June 26, 2014

The Permanent Internet Tax Freedom Act

Last week, the House Judiciary Committee voted to approve the Permanent Internet Tax Freedom Act (PITFA), which would make permanent the current moratorium on state and local taxation of Internet access and on discriminatory taxes on emails and other data. The existing moratorium on taxation of Internet access is set to expire on November 1. PITFA also would end the “grandfather clause” that allows seven states to tax Internet access.

The Internet economy is projected to account for 5.4 percent of U.S. GDP by 2016 and a similarly sized share of the G-20 economy. “Proponents of the moratorium have argued that making the Internet access tax moratorium permanent is a necessary step in promoting wider access to the Internet while keeping the cost of access down and eliminating discriminatory taxes,” said Matthew Glans, senior policy analyst at The Heartland Institute.

“People need to understand this bill would prohibit taxes on access to the Internet, not taxes on online purchases. The bill deserves strong support because businesses and individuals of all income levels rely on the Internet for so many important activities,” Steve Stanek, a research fellow at The Heartland Institute, said. He notes “taxing Internet access would make the Internet less affordable, which would make no sense to do.”

Attention state elected officials: There are a limited number of travel scholarships to Heartland’s Emerging Issues Forum still available. Contact Alex Monahan at 312/377-4000 or at amonahan@heartland.org for more information.

 

 

Telecom
Bill Extending Ban on Internet Access Taxes Advances in House

 In this Heartlander digital magazine article, Matthew Glans covers the pending expiration of the Internet access tax moratorium and new legislation moving through Congress that would permanently extend the moratorium. “The bill, titled the Permanent Internet Tax Freedom Act (PITFA), was written by Judiciary Chairman Bob Goodlatte (R-VA) and co-sponsored by 138 Republicans and 76 Democrats. PITFA would make the ITFA moratorium permanent and end a ‘grandfather clause’ that allows seven states to tax Internet access. The seven states enacted Internet access taxes before the moratorium was put in place.” Read More

 Healthcare
Should Harrisburg Become Involved in Highmark/UPMC Dispute?

Matthew Glans writes in the Heartlander digital magazine about the Pennsylvania General Assembly’s consideration of legislation that may force a major health care provider to sign an access contract with an insurer that has become a direct competitor. Glans examines the conflict between health insurer Highmark and the University of Pittsburgh Medical Center (UPMC) and how legislation forcing UPMC into a contract with Highmark could affect the Western Pennsylvania health care market. Read More 
Budget & Tax
 
Tourism taxes have become increasingly popular with city and state governments as a source of new revenue. Tourism taxes such as those on car rentals have advantages for politicians because they are seen as taxing out-of-state visitors, who are unlikely to complain with a vote against them. Today 43 states and the District of Columbia impose a tax on car rentals, and a total of 118 special rental car excise taxes are enforced.  

In this Research & Commentary, Matthew Glans discusses the growth of car rental taxes and new legislation now under consideration in Congress that would restrict state and local taxes on rental cars. “Car rental taxes are poorly designed and discriminatory levies that hinder tourism, harm local economies, and fuel unnecessary government spending. State legislators should eliminate or reduce these taxes.” Read More

 
State Government Relations Manager Logan Pike examines Illinois’ renewable portfolio standard (RPS) and finds the law will lead to higher electricity bills for Illinois residents and businesses, leading to thousands of lost jobs and an overall weaker economy. Read More 
 
The Missouri Legislature awaits the signature of Gov. Jay Nixon on HB 1490, a bill that would replace national Common Core education mandates with Missouri’s own set of educational criteria. The chief sponsor of the bill, state Rep. Kurt Bahr, told Heartland Government Relations Intern Hailey Vrdolyak the bill “can be simplified to three words: sovereignty, privacy, and flexibility.” Read More 
Thirteen states have passed temporary income or sales tax increases since December 2007. More often than not, those states allowed the tax hikes to sunset or expire on time rather than extending higher rates. Illinois Policy Institute calls the bluff on "temporary" tax hikes. Read the report on whether or not your state has allowed temporary tax hikes to sunset or not.

 

 

 
 
The June issue of School Reform News reports the lengths to which parents will go to get their kids into good schools. “My parents worked around the clock to put me and my three older sisters through Catholic education,” said Kara Kerwin, president of the Center for Education Reform. Other parents camp out in order to be first in line to register their kids at a better school ... and some risk jail.