FOR IMMEDIATE RELEASE
June 7, 2007
Contact: Jeffrey Mazzella
703.535.5836
The current two-year moratorium, which is set to expire on November 1 of this year, prohibits states and localities from imposing burdensome and unnecessary sales and use taxes to the Internet. As the letter reads, "The current ban prohibits taxes on Internet access, including broadband as well as dialup connections. It also prohibits discriminatory taxes that treat Internet transactions different from other transactions."
"The Internet has thrived as a tool for commerce, education and civic participation precisely because it has been able to avoid meddling by government regulators and state taxing regimes," said CFIF President Jeffrey Mazzella. "State legislatures for years have been licking their chops in anticipation of slapping new and creative taxes on the Internet and e-commerce as a way to fund new pet projects and grow the size and scope of government. The moratorium is the only thing that has prevented such punitive action."
The letter points out that if the moratorium is allowed to expire in November, it's inevitable that at least some states will impose new taxes on Internet access, as well as other creative taxes like bit-taxes on downloads and even email taxes. There would be no limit to the imposition of new and creative taxes, all of which would serve to impede electronic commerce and the free-flow of information that has enabled the Internet to thrive.
Congress originally passed the moratorium in 1998, and has extended it temporarily on several occasions since. While some in Congress are advocating for yet another temporary extension, the letter points out that "[it] is hard to argue with the clear policy success of the moratorium. Another temporary extension will leave open the possibility of... counterproductive taxes being imposed in the future."
"The moratorium must finally be made permanent," Mazzella concluded.
The Center for Individual Freedom is a constitutional and free-market advocacy organization with more than 250,000 supporters and activists nationwide. CFIF opposes state, federal and international regulations and taxes that impede the evolution of e-commerce and the Internet.