President Clinton signed the Internet Tax Freedom Act on October 21, 1998. It was a temporary measure, renewed again in November 2007. The law was set to expire November 1. This would lead to a tax
increase for everyone using the Internet.
Today the House of Representatives passed H.R. 3086, Permanent Internet Tax Freedom Act. House Judiciary Chairman Bob Goodlatte (R-Va.) said the act would prevent an unexpectedly higher tax bill for Internet use.
“This legislation prevents a surprise tax hike on Americans’ critical services this fall,” Goodlatte said. “It also maintains unfettered access to one of the most unique gateways to knowledge and engine of self-improvement in all of human history.”
The bill must now clear the Senate. Concerns are that the Senate may attach the Marketplace Fairness Act. This is pending legislation to allow states to require online retailers to collect sales tax and use tax on items.