The Senate recently joined the House in approving a permanent ban on state and local governments taxing Internet access. The White House has indicated that President Barack Obama intends to sign the measure into law.
By a vote of 75-20, the Senate passed H.R. 644, the Trade Facilitation and Trade Enforcement Act, which contained a measure permanently extending the "Internet Tax Freedom Act" (the "ITFA"). The ITFA was initially enacted in 1998 and temporarily extended seven times with robust bipartisan support. The House passed the permanent extension in December 2015.
The measure is especially important to franchisors who rely heavily on affordable Internet access to build franchise concepts, promote their brand and connect with prospective franchisees. Since 1998, the ITFA has protected consumers from a potential patchwork of taxation by America's approximately 9,600 taxing jurisdictions. And franchisors know as well as anyone the resources it takes to comply with multiple sources of regulation.
The clarity of a permanent ban paves the way for franchisors to take calculated risks and make the investments in their concepts that strengthen the franchise marketplace.
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