Pete Sepp: Minnesota’s senators can help keep the Internet tax-free
While September generally brings cool fall air to Minnesota, in Washington, D.C., the heat seems to rise. Year after year, seat-of-the-pants policymaking puts off long-term action on unsustainable fiscal policies. Now elected officials, including Sen. Amy Klobuchar, D-MInn., and Sen. Al Franken, D-Minn, will rush back to work after August recess to debate pressing matters of Congress's own making. The list is long — such as addressing the nation's debt limit, enacting an affordable highway bill — and most are divisive.
Thankfully, some issues are easy calls and should advance past the political quagmire.
On Oct. 1, Minnesotans and Americans across the country could face higher costs for accessing the Internet if the U.S. Senate does not extend the Permanent Internet Tax Freedom Act, a bill that has already cleared the House of Representatives.
This legislation is not to be confused with Rochester's efforts concerning municipal broadband. Neither should it be linked to the online sales tax implemented in 2014 in Minnesota, nor to efforts in Washington that would empower all states to reach across their borders and aggressively collect taxes from e-commerce. Rather, the Permanent Internet Tax Freedom Act simply prevents state and local governments from taxing broadband access and services.
Originally in enacted in October of 1998, Democratic President Bill Clinton signed an Internet tax moratorium into law as a way to promote consumer and business adoption of this transformational technology by reducing its costs. Although the Internet has certainly taken root in our society since then, the Permanent Internet Tax Freedom Act is needed now more than ever.
Minnesota ranks 23rd in overall Internet speed throughout the country. According to recent figures, a massive disparity exists between rural, urban and suburban regions of the state. In fact, only 0.06 percent of rural Aitkin County is served by high-speed Internet, whereas in Twin Cities suburb Anoka County, 97 percent of the homes are served.
A permanent Internet tax moratorium is exactly what places like Aitkin County need — a law that will remove financial impediments to broadband access and help to get rural Minnesotans online.
Championed by Rep. Bob Goodlatte, R-Va., and Rep. Anna Eshoo, D-Calif., the Permanent Internet Tax Freedom Act overwhelmingly passed the House in June, with 188 bipartisan co-sponsors. This is all the more reason why Klobuchar, Franken and their colleagues need to act, and avoid the temptation to conflate tax-free Internet access with an entirely unrelated piece of legislation known as the Marketplace Fairness Act.
That bill, which both Minnesota senators support, would create a federal statute permitting state and local governments to rake in online sales taxes from companies having no physical presence within their borders. It is a contentious proposal that would not advance in the House of Representatives.
The bottom line, however, is that the Marketplace Fairness Act has nothing to do with the extension of the widely popular Internet Tax Moratorium awaiting action. Trying to unite the two only makes the expiration of the access tax ban that much more of a reality. This is not the way to ease Washington's gridlock or accomplish legislative goals.
The Internet has become far too integral in the lives of Minnesotans for Congress to create unnecessary barriers to access. Its services connect families and businesses around the world and has contributed to economic growth and development in numerous ways. It is crucial that the Senate votes to pass a "clean" version of the Permanent Internet Tax Freedom Act. Franken and Klobuchar should resist politically motivated delays and lead the way to enactment when they return to work.
Pete Sepp is President of the National Taxpayers Union, a non-partisan citizen group founded in 1969.