Congress Delays Lingering Internet Tax Debate Until 2015

One of the best advantages of shopping online is that consumers, when it comes to most online retailers, do not have to pay sales tax. Of course, that could all change as the U.S. Congress has been looking into the issue of Internet taxes that encompass both online state sales taxes and online access taxes but for now, the debate is being postponed until 2015.

On Tuesday, Senator Ron Wyden (Dem, OR) said that the government spending bill, which could be released as soon as Tuesday, will extend the ban on Internet taxes for a year. Senator Wyden co-wrote The Internet Tax Freedom Act that prohibits state and local governments from charging discriminatory internet-only taxes such as bandwidth and email taxes. However, it doesn’t exempt online sales from being taxed at state and local rates. 

“A fair and open Internet is an engine of economic growth in America, a launching pad for entrepreneurs and history’s most powerful tool of communication,” said Wyden in a statement. “By extending this bill, the Congress has, for the short term, ensured that this longstanding policy keeps Internet access tax-free. I’m going to continue fighting to ensure that these protections will bolster the digital economy for the long term.”

Brick-and-mortar retailers have pushed for online sales tax collection to help create a level playing field. However, a proposed law requiring that online retailers pay a tax fell apart in November.

While the issue of Internet taxes has been pushed to next year, House Republican leaders plan to address the matter in early 2015 when the Republican Party controls both the House and Senate.