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February 12, 2016

Senate Passes Customs Bill With PITFA Intact

IPI expert referenced: Tom Giovanetti | In The News | Media Hit
  Washington Internet Daily

The Senate voted 75-20 Tuesday to approve the conference version of the Trade Facilitation and Trade Enforcement Act (HR-644), with language from the Permanent Internet Tax Freedom Act (PITFA) attached, as expected (see 1602100061). President Barack Obama intends to sign HR-644, the White House said in a statement. The House passed the conference version of HR-644 in December (see 1512110058). Industry stakeholders praised Senate passage of HR-644 with the PITFA language intact. Some also noted what they view as a renewed fight against consideration of the Marketplace Fairness Act (S-698), which would let states tax remote sellers that have annual revenue exceeding $1 million.

Several of the 20 senators who voted against HR-644 Thursday cited the presence of the PITFA language as the major reason for their continued opposition to the bill. Sen. Lamar Alexander, R-Tenn., who had dropped his plans to raise a point of order in conjunction with Senate Democratic Whip Dick Durbin, D-Ill., to strip PITFA from HR-644, voted against the bill as promised. "According to the Republican conference rules, [congressional Republicans believe] Congress should not create new federal unfunded mandates on state and local governments," Alexander said on the Senate floor before a final vote on HR-644. The vote that "we're about to cast breaks that promise." Durbin also voted against HR-644 but said on the Senate floor that he would keep his pledge to not seek the removal of PITFA language from the bill because of Senate Majority Leader Mitch McConnell's, R-Ky., promise to allow Senate consideration of S-698 this year.

Passage of PITFA as part of HR-644 now "intensifies" S-698 opponents' push to "stave off the attempt" to pass that bill, said Institute for Policy Innovation President Tom Giovanetti in a statement. S-698 "has never had committee scrutiny on the Senate side and [has] never been subject to amendment on the floor." Senate Republican leaders "must commit to first submitting this legislation to the same procedures, hearings and scrutiny appropriate to any and all legislation, especially since this proposal has serious Constitutional questions," Giovanetti said.

Other PITFA supporters' statements lauded Senate passage of HR-644, including those from FCC Commissioners Mike O'Rielly and Ajit Pai. O'Rielly said he's "ecstatic" the Senate passed HR-644 with the PITFA language intact.

"This is great news for American Internet consumers," O'Rielly said. "By preventing state and local taxes on Internet access and double taxation, it marks a firm path for future Internet policies." HR-644's passage "confirms a national consensus that state and local taxes on Internet access should be taken off the table once and for all," Pai said. "These taxes would make (and in some places already have made) broadband more expensive, reducing consumers' ability and willingness to get online."

PITFA "will protect millions of Americans from discriminatory taxes on Internet access and encourage further innovation, investment, and increased broadband adoption," said USTelecom President Walter McCormack. CTIA President Meredith Baker said HR-644's passage means achievement of CTIA's long push to make the 1998 Internet Tax Freedom Act permanent "is now at hand." Enactment of PITFA "is sound fiscal policy that will help grow the Internet economy by encouraging network investment and broadband adoption," said CenturyLink Senior Vice President-Public Policy and Government Relations John Jones. PITFA will also "encourage more innovation and investment in mobile broadband," said T-Mobile Vice President-Federal Legislative Affairs Tony Russo.


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