Taxes

A Policymaker’s Guide to Internet Tax

March 19, 2013
| Reports

Within the first two months of 2013, identical bills in the U.S. House and Senate have been introduced that would provide a federal framework in which states could opt to require remote sellers to collect state sales taxes. A bill has been introduced in the U.S. Senate to permanently extend the moratorium on taxation of Internet access, the Florida legislature passed a law to tax Internet sales from out-of-state sellers, and the online retail giant, Amazon, has agreed to collect a 6.35 percent sales tax from consumers in Connecticut. Are these decisions inconsistent or unrelated to one another? Why should Amazon pay taxes in Connecticut and not in, say, Oklahoma? There is no shortage of interest among states and localities in new or better-enforced sources of revenue from the Internet, yet in the current legal environment of Internet taxes, there is confusion over the most appropriate policy options moving forward.

This guide explains the state of current law and how policymakers should approach taxing online, digital activity. It focuses on four particular areas: the Internet tax moratorium, multiple and discriminatory taxes of digital goods, discriminatory taxes on wireless services, and the collection of sales taxes for online purchases of products. Too often these issues are confused, or even worse, lumped together by the bumper-sticker debate between “Don’t Tax the Net” and “Level the Tax Playing Field,” but in fact these issues are distinct and deserve distinct policy responses. ITIF believes Congress should address each of these four areas through proposed legislation.

The report focuses on four pieces of federal legislation and recommends:

  • An Extension of the Internet Tax Freedom Act, which prohibits taxing of Internet access, multiple taxes on Internet transactions, and discriminatory taxes on online transactions, and sunsets on Nov. 1, 2014. ITIF is in favor of making the moratorium permanent to prevent unnecessary and excessive taxation that could reduce the benefits of the digital economy.
  • The Digital Goods and Services Fairness Act should prohibit state and local governments from creating multiple or discriminatory taxes on digital goods and services. ITIF calls for passage of the bill because it will help ensure a fair, consistent, and non-discriminatory tax system.
  • The Wireless Tax Fairness Act imposes a five-year moratorium on all new discriminatory taxes on mobile phone services or providers. ITIF is in favor of the bill, to prevent undue taxation on the wireless economy, but argues the moratorium should be made permanent.
  • The Marketplace Fairness Act of 2013 authorizes states to require collection of sales and use taxes on goods sold online. ITIF calls for the passage of the bill to reduce discrimination against sales from traditional, brick-and-mortar companies, and increase overall tax fairness.

ITIF Assesses Potential Overhaul of U.S. Internet Tax Policy

WASHINGTON (March 19, 2013) - The Information Technology and Innovation Foundation (ITIF) released a report today analyzing the current state of Internet tax policy and the packages being considered to assist policymakers and the public in making better decisions on how to reform the system. A Policymaker's Guide to Internet Tax provides a comprehensive review of the proposals and their potential impacts on innovation and economic growth in the Internet sector. Read more »

A Policymaker’s Guide to Internet Tax

March 19, 2013
IPI and ITIF hosted a lunch briefing to untangle Internet tax policy.

Ever wonder what the difference is between the Internet tax moratorium and the Main Street Internet Tax Fairness Act? If so, you aren’t alone. In fact, the Internet and telecommunications are subject to a variety of taxes at different levels of government. At least four different tax proposals are either in Congress or about to be introduced that would reduce tax discrimination in the e-commerce, telecom and Internet space. They sound similar but have very different intents and outcomes. Read more »

See video

Lawmakers Say Online Sales Tax May Have to Stand on its Own

Politico
ITIF President Rob Atkinson, speaking at a Politico Pro event, said the Marketplace Fairness Act bill doesn't need to be watered down to appease some parties.

Deep Dive: Tax Reform and the Technology Sector

March 16, 2013
The Politico Pro team presents an in-depth conversation with special guest Rob Atkinson, President, Information Technology and Innovation Foundation.

The Politico Pro team presents an in-depth conversation with special guests Rob Atkinson, President, Information Technology and Innovation Foundation; Laura Bishop, Vice President of Government Relations, Best Buy; Scott Hodge, President, Tax Foundation; Rep. Ron Kind (D-Wis.), Chairman, New Democrat Coalition; Rep. Aaron Schock (R-Ill.), Member, House Ways and Means Committee and Rep. Steve Womack (R-Ark.), Member, House Appropriations Committee. Read more »

Hill Briefing: Top Industry Analysts Untangle E-Commerce, Internet Tax Proposals

WASHINGTON (March 15, 2013) - At least four different tax proposals are either in Congress or about to be introduced that would reduce tax discrimination in the e-commerce, telecom and Internet space. While the bills may sound similar, they have very different intents and outcomes, and all could have a significant effect on consumers and businesses. Read more »

Offshore Cash Hoard Expands by $183 Billion at Companies

Bloomberg Businessweek
Reforming corporate tax offshoring could help the problems but isn't going make them all go away, according to Rob Atkinson.

Deep Dive: Tax Reform and the Technology Sector

March 6, 2013
| Presentations

Rob Atkinson, president of ITIF will participate in a discussion on tax reform in the tech industry hosted by Politico at the Newseum. Other participants include Laura Bishop, Vice President of Government Relations, Best Buy; Scott Hodge, President, Tax Foundation; Rep. Ron Kind (D-Wis.), Chairman, New Democrat Coalition; Rep. Aaron Schock (R-Ill.), Member, House Ways and Means Committee and Rep. Steve Womack (R-Ark.), Member, House Appropriations Committee. 


Tweet your questions to #ProTDD.

Taxation of Intangibles: Implications for Growth, Jobs and Competitiveness

February 13, 2013
| Presentations

Rob Atkinson presentation at the fourteenth annual Tax Policy and Practice Symposium on the Taxation of Intangibles: A focus on intangibles (or tangibles) confuses the real issue. From an economic policy perspective, the focus should not be on intangible capital versus tangible capital. It should be on “smart” capital that generates societal externalities and growth vs. other expenditures that from a societal perspective are capitalized consumption.

Winning the Race 2012 Memos: Corporate Tax

September 17, 2012
| Reports

If the U.S. economy is to once again become globally competitive and driven by productive investment we need a tax code that provides generous incentives to invest in innovation and productivity while at the same time putting U.S. establishments that compete in global markets on a more level playing field with foreign competitors. Yet today’s partisan clash over taxes is the same one we have seen in every election for decades. Most Republicans insist that all taxes need to be reduced. Many Democrats insist on maintaining revenues needed for government programs they regard as critical and making sure “the wealthy pay their share.” However, this clash misses the point. Yes, we need lower taxes, but on businesses, not individuals. And we also need to expand investment incentives if businesses are to create good jobs in America. If even some of the most liberal states in the nation have figured out that a competitive corporate tax code designed in the context of fiscal discipline is not a choice but a requirement if workers are to prosper, surely Washington can do the same.

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