Grant Gross wrote a piece on PC World about the Permanent Internet Tax Freedom Act. There has been a ban on Internet access taxes for several years in most states. The ban has been extended three times. As I said some states had these taxes and there was a grandfather clause which allowed states like Texas to take in $350 million per year.

From the article:

The House, in a voice vote Tuesday, passed the Permanent Internet Tax Freedom Act, over the objections of some Democrats. In addition to permanently banning states and local governments from taxing Internet access, the bill would ban any other form of Internet-only taxes, although its aimed primarily at taxes on Internet access service.

The Senate would have to pass the access tax moratorium bill for it to become law. A temporary ban expires on Nov. 1.

The legislation also eliminates an exception allowing seven states, including Texas and Ohio, to collect taxes on Internet access. The grandfather clause in the temporary extensions to the ban applied to states that had taxes in place before Congress passed the first tax moratorium in 1998.

The elimination of the grandfather clause will cost Texas $350 million and Wisconsin $127 million in tax revenue each year, said Representative John Conyers Jr., a Michigan Democrat. The legislation will “severely impact” the grandfathered states’ budgets, and will limit the ability of all states to raise tax revenue in the future, he said.

The temporary tax bans included the grandfather clause to allow states that taxed Internet access time to find other sources of revenue, said Representative Bob Goodlatte, a Virginia Republican. “It’s been 16 years—time enough to change their tax code,” he said.

Read the full article here