Permanent Internet Tax Freedom Act

Floor Speech

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Ms. DELBENE. Madam Speaker, several weeks ago, I joined my colleagues on the House Judiciary Committee in supporting the Permanent Internet Tax Freedom Act when it was reported out of committee by a vote of 30 to 4.

It is clear that there is broad bipartisan agreement that we should not allow the current moratorium on Internet access taxes to expire. While I joined my colleagues in moving this legislation forward to provide clarity and certainty in this area, I also have serious concerns that Congress has failed to resolve another critical issue related to state taxation and the Internet: e-fairness and the current exemption for state and local sales tax collection for online purchases.

Since the Internet Tax Freedom Act first passed in 1998, Congress has made far too little progress in developing a coherent policy that addresses the intersection of state taxation and the Internet. Aside from extending this tax moratorium three times since it first passed, Congress has yet to pass legislation like the Marketplace Fairness Act or similar legislation that would allow states to tax e-commerce sales at the same rate as sales from brick-and-mortar stores. Instead we have seen states attempting to set a patchwork of policies that simply doesn't work. A federal solution is needed from Congress.

In the meantime, adoption of the Internet has exploded since ITFA first passed in 1998, and today, 75 percent of American households subscribe to broadband Internet services, and hundreds of billions of dollars worth of commerce is done over the Internet annually. The Census Bureau recently announced that total e-commerce sales for 2013 were estimated to have increased nearly 17 percent (16.9 percent) from 2012, totaling $263 billion in 2013.

Given the importance of the Internet to consumers and to economic growth, it is Congress's responsibility to determine a federal approach to e-fairness, and I am disappointed that we are simply looking at this bill in isolation without regard to the other issues related to Internet and taxation.

While I support an extension of the current moratorium on Internet access taxes, I believe we cannot move this legislation forward while also continuing to allow the Internet to serve as a sales tax loophole. The issue of e-fairness is a related issue that we must commit to tackling, and I know there is bipartisan support for doing so.

This is a critical jobs issue that I continue to hear about from small businesses in my district.

It is the role of Congress to ensure that our nation's tax policies and regulation don't unfairly burden one business model over the other. Yet, brick and mortar businesses can't fairly compete right now because states do not have the ability to efficiently collect the taxes owed from online purchases. Only Congress can fix this and I believe we must continue to move forward on legislation like the Marketplace Fairness Act.

I hope that House Leadership does not consider our work on Internet tax policy complete after voting today on the Permanent Internet Tax Freedom Act and I look forward to continuing to work with members on both sides of the aisle to work to find a solution to move forward on both ITFA and e-fairness legislation like the Marketplace Fairness Act before the end of this year.

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