Home > News > Tax Ban in Question • Bookmark   • Newsletters   • Register Search Options


Tax Ban in Question

Get XBIZ News
Sep 16, 2003 12:00 AM PDT    Text size: 
The U.S. House of Representatives could create a major cramp in the side of Internet commerce this Wednesday if taxation limitations that currently exist on the World Wide Web are revised.

In what could create a dramatic shift for many facets of online industry reliant on untaxed e-commerce transactions, The House of Representatives will decide whether to amend the Internet Tax Freedom Act (ITFA) of 1998, which currently enforces a ban on state and local taxes on Internet services and industry-specific Internet sales transactions.

The current moratorium on Internet taxation expires Nov. 1, 2003.

The ITFA was first authored by Representative Christopher Cox (R. Calif.) of Newport Beach and Senator Ron Wyden (D.-Ore.) to prohibit taxes on Internet access, taxation by multiple states on products purchased over the Internet, and taxes that treat Internet purchases differently from other types of sales.

Lawmakers interested in lifting the ban and turning the tables on Internet taxation have so far been stymied by a state-wide block on collecting tax levies as ruled nearly ten years ago by the U.S. Supreme Court. That ruling as it holds requires only businesses with a "physical presence" in the same state as the consumer to be able to legitimately collect taxes.

Many critics of the ITFA say that the extended moratorium significantly reduces state and local government revenue.

Currently 12 states are exempt from the ITFA. However, if The House of Representatives votes to extend the ITFA, those exemptions would be overturned and there could be state revenue losses in the hundreds of millions, depending on Internet growth projections, say ITFA critics.

The ITFA ban on Internet taxes first expired in October of 2001 and was again signed into law for a three-year extension on Nov. 1, 2001 as the Internet Non-Discrimination Act.

So far Congress is holding fast to the idea that Internet taxation would have an adverse effect on the economy and e-commerce as a whole.

"Given the continued softness in the tech economy, this is hardly the time for new taxes on the Internet," stated Rep. Cox. "Rather, providing long-term certainty about tax policy is one of the necessary ingredients for a tech rebound."

In January of this year Rep. Cox and Senator Wyden introduced additional legislation that would indefinitely extend the ban on "new and discriminatory" taxes on the Internet.

That same bill is being passed before the House of Representatives this week in hopes of securing the ban on taxation indefinitely, according to Rep. Cox's office.

"By ending this unfair practice once and for all, we can protect Internet users from unnecessary and burdensome taxes," Cox continued. "This will encourage spending, promote investment, expand business, and create new jobs."

More ways to get XBIZ News:  RSS Feeds  |  E-Newsletters  |  Desktop Widget  |  Mobile
Looking for porn star news and behind-the-scene videos? Check out XFANZ.com !


Manufacturers Take Action Against Counterfeit Sex Toys

The mainstreaming of pleasure products is proving to be a blessing and a curse for the sex toy industry. As the demand for pleasure products continues to grow, manufacturers are seeing an increase of counterfeiters... More »

Trends in Paysite Design, Content Delivery

Given the highly visual nature of adult entertainment, it is no surprise that many paysites have shown design-forward approaches — some skirting the bleeding edge, while others sought stability over... More »

Surviving Affiliates Seem to Be Thriving

Long a mainstay of traffic generation for adult website owners and monetization channel for tech savvy marketers, “sponsor programs” have delivered countless millions of dollars to affiliates... More »
Stay informed of the latest industry developments. Get XBIZ newsletters delivered to your inbox. Subscribe today!
Enter email address:

* To manage existing subscriptions click here.

Submit your press release to
multiple news outlets with 1 click.
Subscribe to RSS news feeds or
add free content to your website.
Access XBIZ news and articles
with your mobile device.

Deprecated: mysql_connect(): The mysql extension is deprecated and will be removed in the future: use mysqli or PDO instead in /data/SFTP/xbizid/incoming/web/www/app/inc/proc.init.php on line 5
Subscribe to XBIZ World magazine, the industry's leading e-commerce trade publication, delivering in-depth coverage of the online, mobile and ancillary digital markets.



Oct 05 - Oct 07
Hannover, Germany


Nov 04 - Nov 06
Edison, New Jersey

2016 Inked Awards

Nov 05 - Nov 05
Edison, New Jersey

XBIZ 2017

Jan 09 - Jan 13
Hollywood, CA
Everyday thousands of business professionals browse XBIZ's industry directory for quality products and services. Not listed yet? Your company could be losing potential new business. Submit your company today!
Use XBIZ RSS feeds to stay informed of the latest industry developments or as a content syndication tool for your website!