Saturday, October 19, 2019
Hawai'i Free Press

Current Articles | Archives

Saturday, February 15, 2014
Internet Tax Freedom Act Celebrates Sweet 16
By Grassroot Institute @ 9:10 AM :: 1741 Views

Sweet 16

by Bartlett D. Cleland, Grassroot Blog, February 15, 2014

Almost immediately after the World Wide Web made its debut some folks were hard at work figuring out a way to tax it. One idea was to tax Internet access, or to charge a higher tax on items bought via the Web than if that same item had been bought at a brick-and-mortar store. This Internet looting led to the passage of the Internet Tax Freedom Act (ITFA) in 1998, 16 years ago.

Originally intended to be permanent but negotiated down to merely temporary, and grandfathering in jurisdictions that were already taxing Internet access to give them time to adjust their tax codes and budgets, the law put in place a moratorium on “Internet taxes,” that is, taxes on Internet access and on multiple or discriminatory taxes on Internet commerce. Since then, ITFA has been extended three times, most recently in 2007 when the moratorium was extended for seven years, until November 1.

Legislation has been introduced in both the House and Senate to make permanent the current moratorium on Internet access tax, to permanently prevent multiple or discriminatory taxation of electronic commerce, and to end the grandfathering that provides seven states with various loopholes to continue discriminatorily taxing the Internet.

Several states have already passed legislation allowing for new taxes to take effect as soon as the moratorium ends. And those taxes that were grandfathered in have been accumulating, just as barnacles collect on a ship and cause damage.

With states now imposing an average sales tax rate of 7.5 percent, and an average 11.2 percent tax on telecommunications, the potential damage is considerable. Even worse, Internet service or sales could be taxed more than once. Multiple taxes were proposed when the original moratorium was passed, which is why multiple tax prohibition was included in the moratorium.

If the current moratorium expires, any national Internet policy will dissolve, as states, localities and even mosquito abatement districts enforce their own policies. This tax uncertainty and lack of restraint will result in market uncertainty because of the effect taxes have on expenses and on consumer uptake of broadband. The uncertainty in consumer uptake leads to less infrastructure build-out, but also, Internet use and application as a business input become muted rather than continuing to be an engine of innovation. Business innovation fails in an uncertain market when new ideas become too risky to try, so new businesses and new jobs fail to materialize.

In the end, those most hurt are those who can least afford to bear increased costs for access to broadband, new uses like education and health care opportunities, and those most vulnerable to the further loss of jobs. Small businesses that have been built on access to technology also suffer when the means to a global market is hindered.

If there is opposition to a continued moratorium and the elimination of discrimination against the Internet and related businesses, then let it be made publicly. Let the opposition explain how broadband adoption should not be a national priority, or that economic growth is not important.

The time is now for Congress to recognize that a permanent moratorium has come of age and mark the occasion by saying goodbye forever to discrimination. A permanent, uniform moratorium opposing discrimination against the Internet is the answer.


Bartlett D. Cleland is Policy Counsel for the Institute for Policy Innovation. Read more at


TEXT "follow HawaiiFreePress" to 40404

Register to Vote


808 Silent Majority

808 State Update AM940


ACA Signups Hawaii



Alliance Defending Freedom

Aloha Life Advocates

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

American Mothers of Hawaii



Antonio Gramsci Reading List

A Place for Women in Waipio

Audit The Rail

Ballotpedia Hawaii

Better Hawaii 

Blaisdell Memorial Project

Broken Trust

CAFR Hawaii

Castaway Conservative

Children's Alliance Hawaii

Children's Rights Institute

Christian Homeschoolers of Hawaii

Citizens for Recall

Cliff Slater's Second Opinion

Coffee Break

Conservative Forum for Hawaii

CSIS Pacific Forum

DAR Hawaii

DVids Hawaii

E Hana Kakou Kelii Akina

E Māua Ola i Moku o Keawe

Farmers For Choice Hawaii


Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Get Off Your Butts!

God, Freedom, America

Grassroot Institute

Hawaii Aganst Assisted Suicide

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Coalition Against Legalized Gambling

Hawaii ConCon Info

Hawaii Credit Union Watch

Hawaii Crime Victims' Rights

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defending Marriage

Hawaii Defense Foundation

Hawaii Families for Educational Choice

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Firearm Community

Hawaii Fishermen's Alliance

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii Jihadi Trial

Hawaii March for Life

Hawaii Meth Project

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Right to Life -- Big Island

Hawaii Right to Life -- Oahu

Hawaii Shield Law Coalition

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Together

Heritage Foundation

HI Coalition Against Legalized Gambling



Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Homeless Crisis

Honolulu Navy League

Honolulu Traffic

Horns of Jericho Blog

House Minority Blog

House Republican Caucus YouTube


Hump Day Report

I Vote Hawaii

If Hawaii News

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

Judgepedia Hawaii

July 4 in Hawaii

Kahle v New Hope

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes


Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Malama Pregnancy Center of Maui

Mauna Kea Recreational Users Group

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii


National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

Oahu Alternative Transport

ObamaCare Abortion Hawaii


OHA Lies

Opt Out Today

Pacific Aviation Museum

Patients Rights Council Hawaii

PEACE Hawaii

People vs Machine

Pritchett Cartoons 

Pro-GMO Hawaii


Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Salvage The Rail

Save the Plastic Bag

School Choice in Hawaii

SIFE Remington

SIFE W. Oahu 

Sink the Jones Act

Smart About Marijuana--Hawaii

St Marianne Cope

State Budget Solutions Hawaii

State Policy Network

Statehood for Guam

Tax Foundation of Hawaii

The Harriet Tubman Agenda

The Long War Journal

The Real Hanabusa

Time Out Honolulu

Truth About Trade & Technology - Hawaii

UCC Truths

Union Members Know Your Rights

US Tax Foundation Hawaii Info

Valor in the Pacific

VAREP Honolulu

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii