The US House of Representatives has approved a bill that will permanently bar states from collecting taxes on internet sales.
The House on Friday gave its approval for HR 644, a trade bill that has been amended to include a permanent renewal of the Internet Tax Freedom Act. Part of the Trade Facilitation and Enforcement Act of 2015, the bill won the approval of the House by a vote of 156-158.
In passing the bill, the House also approved the renewal of the act that bars state and local governments from taxing internet access. First passed in 1998, the Internet Tax Freedom Act has been renewed several times since.
The most controversial element of the act includes the limit on the collection of sales tax, barring states from collecting tax for online transactions made out-of-state. The law, credited with helping online giants including Amazon to become retail powerhouses, has been criticized by state governments and retailers for giving internet sellers an unfair advantage over brick-and-mortar stores that have to pay tax.
The bill will now move on to the Senate for consideration. Should it pass, the bill would then go to the President for approval.
Backers of the law, including Congressman Ron Wyden (D-OR), hailed the passage and asked voters to prod members of the Senate to keep the Internet Tax Freedom Act permanent.
“The ban on internet access taxes expires in just a few days, and there’s a good chance this fight over sales taxes could sink the law that has helped the internet grow and thrive,” Wyden said.
“I’m telling my colleagues to keep these issues separate. Now’s not the time to risk steep new taxes on the growing digital economy.” ®
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