Congress Should Let States Decide Whether or Not to Tax Internet Access

This week the U.S. House of Representatives took a big step towards making a temporary ban on state and local taxes on internet access permanent by approving the “Permanent Internet Tax Freedom Act.” But taking away the ability of state and local governments to levy this tax is the wrong way to go and ties the hands of policymakers in New Jersey and other states.

As anyone who follows the state budget knows, New Jersey is in a fiscal crisis and revenues have not been strong and stable enough to pay for the important public services our residents demand. State lawmakers should at least have the option of taxing internet access – a choice that could bring in an estimated $235 million a year if New Jersey applied its existing 7 percent sales tax to this service.

While its likely that not all New Jersey policymakers would think taxing internet access is a good idea, they should at least have the choice. Congress shouldn’t tie their hands; it should instead lift the ban and let state and local governments decide for themselves.

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