House, Senate Consider Renewing Ban on Internet Access Tax

WASHINGTON — The U.S. House of Representatives began a debate on Tuesday on a law currently restricting state governments from taxing Internet access.

The Internet Tax Freedom Act, passed in 1998, says that local governments generally cannot tax Internet access, including DSL, cable modem and BlackBerry-type wireless transmission services. The law also prohibits governments from taxing items sold online differently from items sold at brick-and-mortar stores. It does not deal with sales taxes on online shopping.

The House Judiciary Committee's Subcommittee on Commercial and Administrative Law held a brief oversight hearing on whether the restriction should be made permanent or allowed to lapse on Nov. 1.

"If we could liken the Internet to a mall, a place where you can go in and purchase goods and services, and also liken it to a library, a place where you can go and pull a book, pull a resource, and obtain some information," Rep. Hank Johnson, D-Ga., said, "Why would we tax a person upon entering a mall or why would we tax a person upon entering the library?

Internet access providers support making the tax ban permanent, and Rep. Anna Eshoo, D-Calif., who represents California's Silicon Valley, introduced the "Permanent Internet Tax Freedom Act" in January. Similar bills have been proposed in the Senate.

State and local governments want to end the tax ban, because extending it would deprive states of revenue indefinitely, and that the original purpose of the tax ban — encouraging use of the Internet — has essentially been accomplished.

"If a moratorium is made permanent, there is a slippery slope where other industries will seek their own preemptions of state laws," David Quam, director of federal relations for the National Governors Association, said.

Quam said that the NGA supports extending the ban in a limited sense and for a defined time period. Reports by government auditors and the University of Tennessee have shown no statistical correlation between levels of broadband penetration and the existence of Internet access taxes, according to Quam.

"Taxes always impact everything else in our economy," Rep. Jim Jordan, R-Ohio, one of 66 House members who co-sponsored the permanent ban proposal, said. "I would assume they've had a major impact in this area as well."

A U.S. Senate committee considered the issue at its own hearing Wednesday.

Copyright © 2025 Adnet Media. All Rights Reserved. XBIZ is a trademark of Adnet Media.
Reproduction in whole or in part in any form or medium without express written permission is prohibited.

More News

AV Bulletin: Age Verification Hits the Mainstream, Ofcom Sets a Date

Industry stakeholders and free speech advocates have anxiously been awaiting the Supreme Court’s decision in Free Speech Coalition v. Paxton, which could significantly impact state age verification laws around the country. In the meantime, state legislatures continue to weigh and pass AV bills, AV tech providers continue to tout their services, and legal challenges continue to play out in the courts — with some cases on hold pending the SCOTUS ruling in Paxton.

Arcom Reports Age Verification Enforcement Actions Against 5 Adult Sites

French media regulator Arcom released a statement Tuesday detailing recent actions to enforce age verification rules as set forth under France’s Security and Regulation of the Digital Space (SREN) law.

Ron Jeremy's Accusers Reach Settlement With Rainbow Bar & Grill

The Rainbow Bar & Grill has reached confidential settlements with a group of women who filed a negligence lawsuit against the Sunset Strip restaurant over alleged sexual assaults committed by Ron Jeremy, according to Rolling Stone.

Sportsheets Joins FSC as Gold Member

Sportsheets has joined Free Speech Coalition (FSC) as a Gold-level member.

AV Bulletin: Two End Runs, Two Failed Bills

Industry stakeholders and free speech advocates have anxiously been awaiting the Supreme Court’s decision in Free Speech Coalition v. Paxton, which could significantly impact state age verification laws around the country. In the meantime, state legislatures continue to weigh and pass AV bills, AV tech providers continue to tout their services, and legal challenges continue to play out in the courts — with some cases on hold pending the SCOTUS ruling in Paxton.

FSC Helps Defeat Colorado AV Bill

Free Speech Coalition (FSC) has announced that, with its help, Colorado's recently introduced age verification bill has been defeated.

Missouri AG Bypasses Legislature, Declares Age Verification Rule

Missouri Attorney General Andrew Bailey on Wednesday announced a new state regulation requiring adult sites to implement age verification of users, bypassing the legislative process in a strategy not seen before in state-level efforts to mandate age verification.

Attorney Corey D. Silverstein Launches 'Q&A Series' on Social Media

Adult industry attorney Corey D. Silverstein has launched a Q&A series on his social media platforms.

'Over the Top' North Carolina Bill Could Play Havoc With Adult Sites

A bill filed in the North Carolina state Assembly on Monday would impose new rules that industry observers warn could push adult websites and platforms to ban most adult creators and content.

Swedish Government Proposes Ban on Purchasing 'Remote' Sexual Services

The Swedish government has asked the country’s Parliament to amend Swedish law so that current laws against purchasing sexual services would also apply to acts performed remotely by cammers, streamers and custom content creators.

Show More