A recent CNet News article highlights a push by the US Congress to target the Internet for tax revenue. If successful, this will change and reshape Internet marketing and web strategies.

Currently state and local governments are prohibited from collecting Internet taxes, but a flurry of bills in the US Congress may change this as early as this fall. Tax free email, Internet shopping and broadband connections may become a thing of the past if congress has their way. Congress is weighing whether to lift a prohibition on Internet taxes, and one senator warns an e-mail tax could happen by this fall.

At the moment, states and municipalities are frequently barred by federal law from collecting both access and sales taxes. Pro-tax and anti-tax forces are jockeying for position before a Net access tax moratorium expires in November.

Those taxes could yield billions of dollars in new revenue by next year. But with Democrats now in control of both chambers of Congress, the political dynamic appears to have shifted in favor of the pro-tax advocates and their allies on Capitol Hill.

If the moratorium expires, one US Senator is predicting taxes on e-mail. A United Nations agency proposed in 1999 the idea of a 1-cent-per-100-message tax, but retreated after criticism.

Current Congressional Bills Pending
Enzi bill: Ushers in mandatory sales taxes on Internet purchases.
S. 156: Renews expiring access tax moratorium permanently.
H.R. 1077: Renews expiring access tax moratorium permanently and eliminates grandfather provision permitting nine states to collect taxes.
H.R. 763: Renews expiring access tax moratorium permanently.

Doug Williams, Web Optimization Firm

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