Broadband Cable Association of Pennsylvania


September 4, 2013

In recent weeks, there has been a flurry of activity in the nation's capital about the future of technology and how consumers' activity online can and should be taxed. At the center of these efforts is Oregon's own Sen. Ron Wyden. A longtime advocate of tech-related issues, Wyden has reached across the aisle to ensure that consumers are not hit with unreasonable and discriminatory taxes and fees when they download apps or just surf the Web.

In the early years of the Internet boom, Wyden co-authored the Internet Tax Freedom Act (ITFA), which prohibited federal, state and local governments from taxing Internet access and imposing a litany of discriminatory taxes on things like email or e-commerce. It was landmark legislation that ushered in an era in which affordable Internet access was available to more and more Americans. As a result of his legislation's ban on prohibitive and costly taxation, 85 percent of Americans use the Internet today, according to a recent Pew Research Center survey. The act's protections were last extended in 2007, but the law faces expiration again next year.

Allowing ITFA to lapse could give way to state and local taxation of Internet access that runs counter to widely accepted goals of expanding access to all Americans. Today, rural schools are using the Internet to tap into educational resources across the globe, and America's farms are using a wide array of mobile apps and services to improve their yields and more effectively manage their crops. Yet rural communities still lag behind their urban counterparts, with 62 percent of rural households and farms connected to broadband against 73 percent of urban households. Taxation of Internet access could make this gap permanent.

To ensure that we do not jeopardize this progress by stifling the public's use of these innovations with unnecessary financial burdens, Wyden has recently introduced a trio of legislative ideas that will enshrine some protections against unreasonable taxes and new measures to provide uniformity to commerce in our new digital age.

The Internet Tax Freedom Forever Act would permanently extend the existing ban on state and local taxation of Internet access. It is common-sense legislation that merely maintains the policy we have had in place for 15 years that has spurred such robust growth in Internet technologies. Similarly, he has introduced the Wireless Tax Fairness Act, which would establish a five-year ban on any new discriminatory state and local taxes on wireless services and consumers. Finally, the Digital Goods and Services Tax Fairness Act would establish a simple, national policy guiding taxes on digital goods purchased online, such as mobile apps or cloud services so consumers are taxed only once and not by multiple states.

Sen. Wyden's legislative proposals currently enjoy broad bipartisan support. Hopefully, because of his status as a leader on all things tech, these pressing broadband-related issues will garner much needed debate and congressional action in the coming months. - Op-ed in Portland Oregonian