NAM Praises House Move to Extend Internet Tax Ban

Washington, DC, July 27, 2007--The National Association of Manufacturers (NAM) applauded the House Judiciary Subcommittee on Commercial and Administrative Law today for moving closer to extending the current ban on taxing Internet access and preventing multiple and discriminatory taxation of e-commerce. 

“New taxes on Internet access amounts to turning the information superhighway into a high-priced toll road,” said Monica McGuire, the NAM’s senior policy director of taxation.  “It will raise the cost of Internet access for more than 365,000 of America’s manufacturers, their suppliers and customers.

“We encourage the Subcommittee to advance the Permanent Internet Tax Freedom Act (H.R. 743) before the congressional recess next month.  Time is of the essence,” she said.  

The moratorium, which has existed since 1998, is set to expire November 1.

“With America’s manufacturers already strapped with high legal costs, regulatory burdens, onerous taxation, high energy prices and rising health care costs, they should not be slapped with new taxes on Internet access,” McGuire said.

The Internet is an essential tool for manufacturing, the largest sector doing business-to-business e-commerce, which spent nearly a trillion dollars in 2004 for cost-saving operations including Just-in-Time inventory management.  Allowing the Internet Tax Moratorium to expire opens the door to more than 7,000 jurisdictions taxing the web, increasing the costs of doing business in the United States and threatening the growth of manufacturing productivity.

“Passing a permanent ban on taxing Internet access and allowing the grandfather clauses to expire once and for all will provide financial certainty for manufacturers,” McGuire said.  “Affordable access to the web and further broadband deployment isn’t a luxury, but a necessity, for manufacturers.”