Let the Good Times Roll: 7 More Years of No Internet Tax
October 26, 2007 1:59 PM
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Congress and the House decided once more to not tax the Internet!
The U.S. Congress and Senate once again agreed to a bipartisan resolution that extends the Internet tax moratorium.
The highly debated issue saw strong support for keeping the Internet tax free from both those in the industry and from grass roots movements. ISPs strongly opposed any sort of taxation as it would hurt their revenues by driving away customers. Users, who joined movements such as the "Don't Tax Our Web Coalition," did not want to be taxed either, as taxation would likely mean higher service charges.
A tax moratorium was originally instituted in 1998 Internet Tax Freedom Act. It was extended twice already, in 2001 and 2004, but has not been permanently passed into law.
The house and senate disagreed on the exact length to ban taxation. The House passed a resolution calling for a four year ban. The Senate wanted a seven year ban. Both legislative bodies saw strong bipartisan support for some kind of ban, though.
Senator Ted Stevens (R-AK) was enthusiastic about the tax moratorium. He elaborated:
"The Internet has provided a powerful economic boost to our nation,and has become an important everyday tool for millions of Americans. By keeping Internet access tax-free and affordable,Congress can encourage Internet use for distance learning,telemedicine, commerce and other important services."
Sadly, the internet is not entirely tax free. The IRS is
pushing a proposal
as part of this year's budget proposal to track user income made on sites such as eBay. They plan to use this information to adjust people's income accordingly.
The proposal for extension of the 1998 Internet Tax Freedom Act will now go to a panel composed of House and Senate members which will iron out the differences between the House and Senate's passed proposals and submit a single proposal to the President.
Should the Internet be tax free? The answer according to the public seems to be overwhelming yes. However, your income from private Internet sales soon will be taxable.
This article is over a month old, voting and posting comments is disabled
10/26/2007 9:44:59 PM
If anything places like Amazon, and especially online banks, have a big advantage.
That may be, but the internet income tax debate is not about corporations and businesses that do business on the internet. They already have to pay taxes on all income they generate, whether from brick and mortar store sales or internet sales.
What the IRS wants is to make it so that companies like eBay and Amazon must report the sales for their users who sell things through them. Like Joe Blow, who works in a cubicle counting beans during the day, and at night maintains an eBay store selling thousands of dollars per year in baseball cards. Currently, Joe is supposed to report that income, but can't be penalized if he doesn't. The IRS wants to make it so that eBay has to report it for him (1099 forms, most likely).
Two completely different things here.
10/27/2007 2:56:19 PM
Aha, I misunderstood. Thank you.
"There's no chance that the iPhone is going to get any significant market share. No chance." -- Microsoft CEO Steve Ballmer
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