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Will the Net Remain Tax Free?



By Roderick Ioerger.

Someone once said there is no such thing as a free lunch.  Well how about a free Internet?  Word out of Washington is that odds are good that the existing moratorium on taxing Internet access will be extended and there is even a distinct possibility that the ban could become permanent.

The Internet is an unusual topic for Congress only in that it is not a partisan issue.  Neither all of the Republicans nor all of the Democrats are on board with the existing moratorium.  It appears that the Republicans are pressing harder for the ban to be permanent while Democrats like Harry Reid, the Senate Majority Leader, prefer to extend the moratorium but still prefer to hedge his bets in case the congress wishes to change its mind in the future.

A number of states have already taken action in one way or another.  Some states have already enacted statewide legislation to make the moratorium permanent while other states passed laws to tax before the federal government acted.  These laws have been grand-fathered in and will be allowed to stand regardless of what the government decides to do.

The largest current concern of many is that the existing moratorium, enacted in 1998, could expire before Congress takes action.  That might cause hasty reactions by states who wish to enact new taxes.  Either way one looks at it, this is an issue that splits the argument between perception and dollars and cents. 

My perception of the situation is that many lawmakers believe this is an issue where they can give in and build up additional good will with their constituents while other law makers see it as new opportunity to generate more funds for the government.  How do you see the situation?  Is this an area where existing technology firms, which generate their income from Internet users, should be banning together to lobby Congress harder?

About Roderick Ioerger

Roderick Ioerger is a long time online marketing and travel industry veteran.

  • http://www.u-g-h.com Owen Cutajar

    The U.S. can try and tax online business, but all this will do will be to force businesses to move to other jurisdications.

    I wonder if this will then give rise to the same level of persecution the egaming community is feeling at the moment …

  • http://www.jaankanellis.com Jaan Kanellis

    Roderick nice seeing you post on MP! Hope to see you around the blogshpere more.

  • http://www.linksbuilding.net asso

    Impossible to tax internet

  • http://www.gelindir.com indir

    I wonder if this will then give rise to the same level of persecution the egaming community is feeling at the moment …