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home : opinion : opinion May 25, 2016

5/29/2014 10:43:00 AM
Will the Washingtons keep access to the internet tax free?
By Jason Mercier Director, WPC Center for Government Reform

Only in Washington D.C. can near unanimous agreement on a policy mean there is danger it may not occur. Consider the pending expiration of the ban on Internet access taxes and whether or not Congress will act in time. As reported by the Wall Street Journal:
"The idea of taxing email is no more popular today than when President Bill Clinton signed the Internet Tax Freedom Act into law. But a dedicated congressional minority now wants to allow states and localities to tax email-unless these governments are given new powers to collect sales taxes on e-commerce.
On Nov. 1 - three days before Election Day - the Internet Tax Freedom Act is due to expire. In place since 1998 and renewed three times, it wisely prohibits taxes that discriminate against the Internet. State and local governments can't impose burdens online that don't exist offline. And multiple jurisdictions can't tax the same online transaction-a critical consumer protection in a country with more than 9,600 taxing authorities. The law also bans email taxes and new taxes on Internet access services.
But in a few months customers may begin receiving notices from their Internet providers that new taxes are on the way. Even though nearly everyone in Congress opposes slapping all of America's heavy traditional telephone taxes on Internet access, a renewal of this successful policy is being held hostage by lobbyists for giant retailers."
With the very real possibility Washington D.C. may fail to extend the Internet access tax ban, how would Washington state respond?
According to the Washington Department of Revenue the state doesn't "have a definitive answer."
Hopefully Governor Inslee and state lawmakers will provide a definitive answer for Washingtonians by forcefully proclaiming that if the federal ban ends Washington state will not impose Internet access taxes.
These comments yesterday from Governor Inslee on a different Internet issue (net neutrality) provides some hope for this occurring (emphasis added):
"I was disappointed that the Federal Communications Commission chose to vote today, disregarding requests from businesses, activists and government officials to delay the vote so discussion could continue about the need for a free and open Internet. I have asked my staff to review the details of the notice of proposed rule making and its potential impacts to Washington. In the coming months, I will work with business, technology and community leaders as we prepare a response to the chairman's proposal. We will show why open access to the Internet is so critical to our economic development and the free marketplace of ideas."
If the other Washington fails to act Washington state officials need to create a rule that sends Internet access taxes straight to the spam file for immediate deletion.

Publisher's comment: If email continues to be tax free then how can the US Post Office be expected to compete. A standard letter is now 49 cents while an email message is free. Is it reasonable to assume that email cannot compete with a hand written letter based on ease of use and speed? If not then it seems there should be some cost for that service that would offset the loss of revenue to the US Post Office. E-Commerce on the other hand creates an opportunity for on-line retailers to compete against local main street businesses by eliminating the government's cut on those transactions. One could easily ask who is being discriminated against by keeping the Internet a tax free zone.

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