Tax & Accounting Blog

Congress Passes Permanent Internet Tax Freedom

Blog, Indirect Tax, ONESOURCE, Sales and Use Tax, Sales Tax Calculation, State & Local Tax February 23, 2016


After extending the moratorium on internet taxation multiple times, congress has finally voted to make the ban on state and local taxation of internet access permanent. See H.R. 644 – Trade Facilitation and Trade Enforcement Act of 2015.

The moratorium was originally signed into law in 1998 with a grandfather clause allowing several states to continue existing taxation.  Today, only a few have continued to tax internet access: Hawaii, New Mexico, North Dakota, Ohio, South Dakota, Texas and Wisconsin.  However, the Act passed by congress ends the grandfather clause effective June 30, 2020.

President Obama is expected to sign the legislation into law.