Internet Tax Freedom Act - Why Not Let It Expire?

On June 18, 2014, the House Judiciary Committee passed H.R. 3086 to make the Internet Freedom Act (ITFA) permanent. Otherwise, it expires on November 1, 2014. It has expired before. The main reason offered to extend it years ago was to help make sure the Internet grew. I think it would have grown even without the Internet Tax Freedom Act (ITFA). The ITFA is a federal prohibition on tax actions of state and local governments. The ITFA says that state and local governments cannot impose tax on Internet access fees. When enacted back in 1998 (P.L. 105-277), very few states even imposed such taxes and they were grandfathered in. The ITFA also prohibits discriminatory taxes on e-commerce.  I think that existing laws, such as the commerce clause, already covered that prohibition.

So, basically, it prohibits state and local governments from doing something they likely won't do anyway.  But why should Congress take that right away from subnational governments?

I wrote an op-ed in 2007 about saying goodbye to the ITFA - I think the arguments still work today.  We have heard that permanence of the ITFA may help Congress enact the Marketplace Fairness Act to allow states to have more vendors collect their sales tax.  We'll see.