Bill Would Preempt Multiple Net Taxes

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Let the online goods flow freely, or at least more freely.

That was the message Thursday from the Hill, where Reps. Rick Boucher (D-Va.) and Lamar Smith (R-Tex.) have introduced a bill that prohibits state and local duplicative taxation of Internet transactions. Boucher is chair of the House Communications Subcommittee, while Smith is the ranking member of the Judiciary Committee.
"Presently, consumers and businesses engaged in digital commerce may be subject to multiple, confusing and burdensome
taxation because of inconsistent rules across the thousands of state and local jurisdictions," they said in announcing
the bill.
The legislation says that taxes may only be imposed on the retail sale of digital goods and services, not on successive
stages of the transaction, and that the tax can only be levied by the jursdiction where the customers tax address is
It would also prevent states from imposing personal property taxes on digital goods and services.
And in the spirit of broadband deployment, it exempts online health, energy management and educational services from all
state and local taxes.
The National Cable & Telecommunications Association, whose members include some of the nation's largest ISPs, supports the bill.

Verizon is a fan as well.

"The Boucher-Smith bill offers a smart solution to a growing Internet-age problem," said Verizon Senior VP Peter Davidson in a statement. "Consumers face potential multiple and discriminatory taxation of the music, movies, games and other goods and services they download from the Internet. Discouraging Internet use makes no sense, particularly at a time when jobs and the economy are top concerns. This legislation takes into account that the new digital economy has no borders, and it creates a uniform framework to protect consumers, much like the Internet Tax Moratorium has done for Internet access. Verizon remains committed to working with stakeholders to craft solutions to the complex problems in this area, and this bill balances Internet consumers' interests with states' and localities' interests in a fair and predictable tax framework."