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House Panel Approves Internet Tax Moratorium

June 27, 2014

On June 19, 2014, the House Judiciary Committee approved H.R. 3086, the Permanent Internet Tax Freedom Act, by a vote of 30-4.

The bill would extend permanently the current moratorium on Internet access taxes, which expires on November 1, and also prohibit multiple or discriminatory taxation of e-commerce.

House Judiciary Committee Chairman Robert Goodlatte (R-VA) indicated this week that the full House is likely to vote on H.R. 3086 during July.  However, there is pressure from proponents of The Marketplace Fairness Act (MFA) to add that bill to the Internet Tax Freedom Act.  The MFA, which would allow states to require remote sellers to collect sales tax on sales made to consumers within a state’s borders, has been stalled in the House since the Senate passed it in May 2013.  The Internet Tax Freedom Act is seen as more popular and urgent and thus could serve as a legislative vehicle for the MFA, which is more controversial.  However, key House members, including Goodlatte, are not in favor of linking the two bills.

Prior to the approval of H.R. 3086 by the House Judiciary Committee, NAR 2014 President Steve Brown sent a letter to Committee Members urging them to pass the measure, and explaining why it is important to REALTORS®.   The letter states in part:  “The REALTOR® business model makes extensive use of the Internet.  Prospective homebuyers search online for homes, offers are made and accepted, and transactions are even closed over the Internet.  This makes the home purchase process far more efficient for buyers and sellers alike, and allows the REALTOR® to provide even better services for both parties.”

NAR's Letter to the House Judiciary Committee