Washington

Permanent ITFA Looks Primed to Pass in Senate

Dems said to remove obstacles to stand-alone MFA consideration 2/09/2016 07:10:00 PM Eastern

It looks as though the permanent Internet Tax Freedom Act (PITFA), after some bumps and bruises, has made it to a glide path to passage this week.

A source said the trade/customs bill that includes PITFA as a rider will get a vote this week (likely Thursday) in the Senate and that the opposition of some Democrats has been assuaged.

Apparently paving the way for that was Senate Majority Leader Mitch McConnell's comments that he would consider a version of Internet sales tax legislation in this session of Congress. 

Some Dems whose states will lose money when PITFA sunsets their grandfathered Internet access taxes had blocked consideration of PITFA, wishing to combine it with that sales tax legislation (the Marketplace Fairness Act). McConnell's pledge to take up that bill apparently clears the way for PITFA.

The National Retail Federation (NRF), which backs MFA, was applauding McConnell's comments and conceding that it "helps to ensure that the important Customs conference report [the aforementioned trade bill] can now proceed in the Senate."

MFA would allow states to collect taxes from online purchases. "Retailers across America urge Congress to finish the job on e-fairness before more Main Street businesses are forced to close their doors due to unfair tax preferences," NRF added.

PITFA has already passed the House—and the Senate Judiciary Committee—and a temporary renewal of the ban--which has been regularly renewed since a temporary ITFA passed in 1998--has been extended through the end of September 2016, but the Senate version, which was added as a rider on a trade bill, did not pass.

In part that was because those Democrats in the handful of states whose grandfathered ISP taxes would be phased out, complained of the last-minute maneuver and said the bill should be paired with MFA, which could help makeup the hundreds of millions of dollars in shortfall from the loss of the ISP tax in their states.

Republicans strongly back ITFA, but not so much the MFA.

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