Guide Note

Initially a service free of taxes, the Internet started to be seen as a potential revenue source by some state governments as its popularity grew. However, in 1998 the first ban on Internet taxes came in the form of the Internet Tax Freedom Act (signed by Bill Clinton). In 2004, President George W. Bush signed the Internet Tax Nondiscrimination Act into law, which banned Internet tax until 2007. Shortly before it was set to expire, The U.S. House of Representatives approved an extension of the tax moratorium for four years. On October 26 of 2007, the U.S. Senate approved a seven year tax ban extension.

Fast Facts

1. Bans all taxes on Internet access
2. Bans double taxation on products purchased online
3. House vote on the extension was 405-2¹
4. Some politicians, including many in the Bush administration, propose a permanent tax ban¹