“This title may be cited as the ‘Internet Tax Freedom Act’.
This chapter, referred to in text, was in the original “this Act”, meaning act June 19, 1934, ch. 652, 48 Stat. 1064, known as the Communications Act of 1934, which is classified principally to this chapter. For complete classification of this Act to the Code, see section 609 of this title and Tables.
1996—Pub. L. 104–104 inserted “, without discrimination on the basis of race, color, religion, national origin, or sex,” after “to all the people of the United States”.
1937—Act
Pub. L. 114–113, div. E, title VI, § 633,
Pub. L. 105–277, div. C, title XI, “This title may be cited as the ‘Internet Tax Freedom Act’. “Not later than 18 months after the date of the enactment of this Act [ “Nothing in this Act [probably means “this title”] shall prohibit Texas or a political subdivision thereof from imposing or collecting the Texas municipal access line fee pursuant to Texas Local Govt. Code Ann. ch. 283 (Vernon 2005) and the definition of access line as determined by the Public Utility Commission of Texas in its ‘Order Adopting Amendments to Section 26.465 As Approved At The “SEC. 1100. SHORT TITLE.“SEC. 1101. MORATORIUM.“(a) No State or political subdivision thereof may impose any of the following taxes:“(1) Taxes on Internet access.“(2) Multiple or discriminatory taxes on electronic commerce.“(b) Except as provided in this section, nothing in this title shall be construed to modify, impair, or supersede, or authorize the modification, impairment, or superseding of, any State or local law pertaining to taxation that is otherwise permissible by or under the Constitution of the United States or other Federal law and in effect on the date of enactment of this Act [“(c) Nothing in this title affects liability for taxes accrued and enforced before the date of enactment of this Act, nor does this title affect ongoing litigation relating to such taxes.“(d) “(1) Subsection (a) shall also not apply in the case of any person or entity who knowingly and with knowledge of the character of the material, in interstate or foreign commerce by means of the World Wide Web, makes any communication for commercial purposes that is available to any minor and that includes any material that is harmful to minors unless such person or entity has restricted access by minors to material that is harmful to minors—“(A) by requiring use of a credit card, debit account, adult access code, or adult personal identification number;“(B) by accepting a digital certificate that verifies age; or“(C) by any other reasonable measures that are feasible under available technology.“(2) For purposes of paragraph (1), a person shall not be considered to [be] making a communication for commercial purposes of material to the extent that the person is—“(A) a telecommunications carrier engaged in the provision of a telecommunications service;“(B) a person engaged in the business of providing an Internet access service;“(C) a person engaged in the business of providing an Internet information location tool; or“(D) similarly engaged in the transmission, storage, retrieval, hosting, formatting, or translation (or any combination thereof) of a communication made by another person, without selection or alteration of the communication.“(3) In this subsection:“(A) The term ‘by means of the World Wide Web’ means by placement of material in a computer server-based file archive so that it is publicly accessible, over the Internet, using hypertext transfer protocol, file transfer protocol, or other similar protocols.“(B) “(i) A person shall be considered to make a communication for commercial purposes only if such person is engaged in the business of making such communications.“(ii) The term ‘engaged in the business’ means that the person who makes a communication, or offers to make a communication, by means of the World Wide Web, that includes any material that is harmful to minors, devotes time, attention, or labor to such activities, as a regular course of such person’s trade or business, with the objective of earning a profit as a result of such activities (although it is not necessary that the person make a profit or that the making or offering to make such communications be the person’s sole or principal business or source of income). A person may be considered to be engaged in the business of making, by means of the World Wide Web, communications for commercial purposes that include material that is harmful to minors, only if the person knowingly causes the material that is harmful to minors to be posted on the World Wide Web or knowingly solicits such material to be posted on the World Wide Web.“(C) The term ‘Internet’ means collectively the myriad of computer and telecommunications facilities, including equipment and operating software, which comprise the interconnected world-wide network of networks that employ the Transmission Control Protocol/Internet Protocol, or any predecessor or successor protocols to such protocol, to communicate information of all kinds by wire or radio.“(D) The term ‘Internet access service’ means a service that enables users to access content, information, electronic mail, or other services offered over the Internet and may also include access to proprietary content, information, and other services as part of a package of services offered to consumers. The term ‘Internet access service’ does not include telecommunications services, except to the extent such services are purchased, used, or sold by a provider of Internet access to provide Internet access.“(E) The term ‘Internet information location tool’ means a service that refers or links users to an online location on the World Wide Web. Such term includes directories, indices, references, pointers, and hypertext links.“(F) The term ‘material that is harmful to minors’ means any communication, picture, image, graphic image file, article, recording, writing, or other matter of any kind that is obscene or that—“(i) the average person, applying contemporary community standards, would find, taking the material as a whole and with respect to minors, is designed to appeal to, or is designed to pander to, the prurient interest;“(ii) depicts, describes, or represents, in a manner patently offensive with respect to minors, an actual or simulated sexual act or sexual contact, an actual or simulated normal or perverted sexual act, or a lewd exhibition of the genitals or post-pubescent female breast; and“(iii) taken as a whole, lacks serious literary, artistic, political, or scientific value for minors.“(G) The term ‘minor’ means any person under 17 years of age.“(H) The terms ‘telecommunications carrier’ and ‘telecommunications service’ have the meanings given such terms in section 3 of the Communications Act of 1934 (47 U.S.C. 153).“(e) “(1) Subsection (a) shall also not apply with respect to an Internet access provider, unless, at the time of entering into an agreement with a customer for the provision of Internet access services, such provider offers such customer (either for a fee or at no charge) screening software that is designed to permit the customer to limit access to material on the Internet that is harmful to minors.“(2) In this subsection:“(A) The term ‘Internet access provider’ means a person engaged in the business of providing a computer and communications facility through which a customer may obtain access to the Internet, but does not include a common carrier to the extent that it provides only telecommunications services.“(B) The term ‘Internet access services’ means the provision of computer and communications services through which a customer using a computer and a modem or other communications device may obtain access to the Internet, but does not include telecommunications services provided by a common carrier.“(C) The term ‘screening software’ means software that is designed to permit a person to limit access to material on the Internet that is harmful to minors.“(3) Paragraph (1) shall apply to agreements for the provision of Internet access services entered into on or after the date that is 6 months after the date of enactment of this Act [“SEC. 1102. ADVISORY COMMISSION ON ELECTRONIC COMMERCE.“(a) There is established a commission to be known as the Advisory Commission on Electronic Commerce (in this title referred to as the ‘Commission’). The Commission shall—“(1) be composed of 19 members appointed in accordance with subsection (b), including the chairperson who shall be selected by the members of the Commission from among themselves; and“(2) conduct its business in accordance with the provisions of this title.“(b) “(1) The Commissioners shall serve for the life of the Commission. The membership of the Commission shall be as follows:“(A) 3 representatives from the Federal Government, comprised of the Secretary of Commerce, the Secretary of the Treasury, and the United States Trade Representative (or their respective delegates).“(B) 8 representatives from State and local governments (one such representative shall be from a State or local government that does not impose a sales tax and one representative shall be from a State that does not impose an income tax).“(C) 8 representatives of the electronic commerce industry (including small business), telecommunications carriers, local retail businesses, and consumer groups, comprised of—“(i) 5 individuals appointed by the Majority Leader of the Senate;“(ii) 3 individuals appointed by the Minority Leader of the Senate;“(iii) 5 individuals appointed by the Speaker of the House of Representatives; and“(iv) 3 individuals appointed by the Minority Leader of the House of Representatives.“(2) Appointments to the Commission shall be made not later than 45 days after the date of the enactment of this Act [“(3) Any vacancy in the Commission shall not affect its powers, but shall be filled in the same manner as the original appointment.“(c) The Commission may accept, use, and dispose of gifts or grants of services or property, both real and personal, for purposes of aiding or facilitating the work of the Commission. Gifts or grants not used at the expiration of the Commission shall be returned to the donor or grantor.“(d) The Commission shall have reasonable access to materials, resources, data, and other information from the Department of Justice, the Department of Commerce, the Department of State, the Department of the Treasury, and the Office of the United States Trade Representative. The Commission shall also have reasonable access to use the facilities of any such Department or Office for purposes of conducting meetings.“(e) The Commission shall terminate 18 months after the date of the enactment of this Act [“(f) “(1) Nine members of the Commission shall constitute a quorum for conducting the business of the Commission.“(2) Any meetings held by the Commission shall be duly noticed at least 14 days in advance and shall be open to the public.“(3) The Commission shall provide opportunities for representatives of the general public, taxpayer groups, consumer groups, and State and local government officials to testify.“(4) The Commission may adopt other rules as needed.“(g) “(1) The Commission shall conduct a thorough study of Federal, State and local, and international taxation and tariff treatment of transactions using the Internet and Internet access and other comparable intrastate, interstate or international sales activities.“(2) The Commission may include in the study under subsection (a)—“(A) an examination of—“(i) barriers imposed in foreign markets on United States providers of property, goods, services, or information engaged in electronic commerce and on United States providers of telecommunications services; and“(ii) how the imposition of such barriers will affect United States consumers, the competitiveness of United States citizens providing property, goods, services, or information in foreign markets, and the growth and maturing of the Internet;“(B) an examination of the collection and administration of consumption taxes on electronic commerce in other countries and the United States, and the impact of such collection on the global economy, including an examination of the relationship between the collection and administration of such taxes when the transaction uses the Internet and when it does not;“(C) an examination of the impact of the Internet and Internet access (particularly voice transmission) on the revenue base for taxes imposed under section 4251 of the Internal Revenue Code of 1986 [26 U.S.C. 4251];“(D) an examination of model State legislation that—“(i) would provide uniform definitions of categories of property, goods, service, or information subject to or exempt from sales and use taxes; and“(ii) would ensure that Internet access services, online services, and communications and transactions using the Internet, Internet access service, or online services would be treated in a tax and technologically neutral manner relative to other forms of remote sales;“(E) an examination of the effects of taxation, including the absence of taxation, on all interstate sales transactions, including transactions using the Internet, on retail businesses and on State and local governments, which examination may include a review of the efforts of State and local governments to collect sales and use taxes owed on in-State purchases from out-of-State sellers; and“(F) the examination of ways to simplify Federal and State and local taxes imposed on the provision of telecommunications services.“(3) Nothing in this section shall include an examination of any fees or charges imposed by the Federal Communications Commission or States related to—“(A) obligations under the Communications Act of 1934 (47 U.S.C. 151 et seq.); or“(B) the implementation of the Telecommunications Act of 1996 [Pub. L. 104–104, see Short Title of 1996 Amendment note set out under section 609 of this title] (or of amendments made by that Act).“(h) The Commission shall, to the extent possible, ensure that its work does not undermine the efforts of the National Tax Association Communications and Electronic Commerce Tax Project.“SEC. 1103. REPORT.“SEC. 1104. GRANDFATHERING OF STATES THAT TAX INTERNET ACCESS.“(a) “(1) Section 1101(a) does not apply to a tax on Internet access that was generally imposed and actually enforced prior to “(A) the tax was authorized by statute; and“(B) either—“(i) a provider of Internet access services had a reasonable opportunity to know, by virtue of a rule or other public proclamation made by the appropriate administrative agency of the State or political subdivision thereof, that such agency has interpreted and applied such tax to Internet access services; or“(ii) a State or political subdivision thereof generally collected such tax on charges for Internet access.“(2) “(A) Except as provided in subparagraph (B), this subsection shall not apply after “(B) “(i) This subsection shall not apply after “(ii) A State telecommunications service tax referred to in subclause (i) is a State tax— “(I) enacted by State law on or after “(II) applied to Internet access through administrative code or regulation issued on or after “(3) Paragraphs (1) and (2) shall not apply to any State that has, more than 24 months prior to the date of enactment of this paragraph [“(b) “(1) Section 1101(a) does not apply to a tax on Internet access that was generally imposed and actually enforced as of “(A) a provider of Internet access services had a reasonable opportunity to know by virtue of a public rule or other public proclamation made by the appropriate administrative agency of the State or political subdivision thereof, that such agency has interpreted and applied such tax to Internet access services; and“(B) a State or political subdivision thereof generally collected such tax on charges for Internet access.“(2) This subsection shall not apply after “(c) “(1) Effective as of “(A) for purposes of subsection (a), the term ‘Internet access’ shall have the meaning given such term by section 1104(5) of this Act, as enacted on “(B) for purposes of subsection (b), the term ‘Internet access’ shall have the meaning given such term by section 1104(5) of this Act as enacted on “(2) Paragraph (1) shall not apply until “(A) generally imposed and actually enforced on telecommunications service purchased, used, or sold by a provider of Internet access, but only if the appropriate administrative agency of a State or political subdivision thereof issued a public ruling prior to “(B) the subject of litigation instituted in a judicial court of competent jurisdiction prior to “(3) No inference of legislative construction shall be drawn from this subsection or the amendments to section 1105(5) made by the Internet Tax Freedom Act Amendments Act of 2007 [Pub. L. 110–108] for any period prior to “SEC. 1105. DEFINITIONS.“For the purposes of this title:“(1) The term ‘bit tax’ means any tax on electronic commerce expressly imposed on or measured by the volume of digital information transmitted electronically, or the volume of digital information per unit of time transmitted electronically, but does not include taxes imposed on the provision of telecommunications.“(2) The term ‘discriminatory tax’ means—“(A) any tax imposed by a State or political subdivision thereof on electronic commerce that—“(i) is not generally imposed and legally collectible by such State or such political subdivision on transactions involving similar property, goods, services, or information accomplished through other means;“(ii) is not generally imposed and legally collectible at the same rate by such State or such political subdivision on transactions involving similar property, goods, services, or information accomplished through other means, unless the rate is lower as part of a phase-out of the tax over not more than a 5-year period;“(iii) imposes an obligation to collect or pay the tax on a different person or entity than in the case of transactions involving similar property, goods, services, or information accomplished through other means;“(iv) establishes a classification of Internet access service providers or online service providers for purposes of establishing a higher tax rate to be imposed on such providers than the tax rate generally applied to providers of similar information services delivered through other means; or“(B) any tax imposed by a State or political subdivision thereof, if—“(i) the sole ability to access a site on a remote seller’s out-of-State computer server is considered a factor in determining a remote seller’s tax collection obligation; or“(ii) a provider of Internet access service or online services is deemed to be the agent of a remote seller for determining tax collection obligations solely as a result of— “(I) the display of a remote seller’s information or content on the out-of-State computer server of a provider of Internet access service or online services; or “(II) the processing of orders through the out-of-State computer server of a provider of Internet access service or online services.“(3) The term ‘electronic commerce’ means any transaction conducted over the Internet or through Internet access, comprising the sale, lease, license, offer, or delivery of property, goods, services, or information, whether or not for consideration, and includes the provision of Internet access.“(4) The term ‘Internet’ means collectively the myriad of computer and telecommunications facilities, including equipment and operating software, which comprise the interconnected world-wide network of networks that employ the Transmission Control Protocol/Internet Protocol, or any predecessor or successor protocols to such protocol, to communicate information of all kinds by wire or radio.“(5) The term ‘Internet access’—“(A) means a service that enables users to connect to the Internet to access content, information, or other services offered over the Internet;“(B) includes the purchase, use or sale of telecommunications by a provider of a service described in subparagraph (A) to the extent such telecommunications are purchased, used or sold—“(i) to provide such service; or“(ii) to otherwise enable users to access content, information or other services offered over the Internet;“(C) includes services that are incidental to the provision of the service described in subparagraph (A) when furnished to users as part of such service, such as a home page, electronic mail and instant messaging (including voice- and video-capable electronic mail and instant messaging), video clips, and personal electronic storage capacity;“(D) does not include voice, audio or video programming, or other products and services (except services described in subparagraph (A), (B), (C), or (E)) that utilize Internet protocol or any successor protocol and for which there is a charge, regardless of whether such charge is separately stated or aggregated with the charge for services described in subparagraph (A), (B), (C), or (E); and“(E) includes a homepage, electronic mail and instant messaging (including voice- and video-capable electronic mail and instant messaging), video clips, and personal electronic storage capacity, that are provided independently or not packaged with Internet access.“(6) “(A) The term ‘multiple tax’ means any tax that is imposed by one State or political subdivision thereof on the same or essentially the same electronic commerce that is also subject to another tax imposed by another State or political subdivision thereof (whether or not at the same rate or on the same basis), without a credit (for example, a resale exemption certificate) for taxes paid in other jurisdictions.“(B) Such term shall not include a sales or use tax imposed by a State and 1 or more political subdivisions thereof on the same electronic commerce or a tax on persons engaged in electronic commerce which also may have been subject to a sales or use tax thereon.“(C) For purposes of subparagraph (B), the term ‘sales or use tax’ means a tax that is imposed on or incident to the sale, purchase, storage, consumption, distribution, or other use of tangible personal property or services as may be defined by laws imposing such tax and which is measured by the amount of the sales price or other charge for such property or service.“(7) The term ‘State’ means any of the several States, the District of Columbia, or any commonwealth, territory, or possession of the United States.“(8) “(A) The term ‘tax’ means—“(i) any charge imposed by any governmental entity for the purpose of generating revenues for governmental purposes, and is not a fee imposed for a specific privilege, service, or benefit conferred; or“(ii) the imposition on a seller of an obligation to collect and to remit to a governmental entity any sales or use tax imposed on a buyer by a governmental entity.“(B) Such term does not include any franchise fee or similar fee imposed by a State or local franchising authority, pursuant to section 622 or 653 of the Communications Act of 1934 (47 U.S.C. 542, 573), or any other fee related to obligations or telecommunications carriers under the Communications Act of 1934 (47 U.S.C. 151 et seq.).“(9) The term ‘telecommunications’ means ‘telecommunications’ as such term is defined in section 3(43) of the Communications Act of 1934 (47 U.S.C. 153(43) [now 153(50)]) and ‘telecommunications service’ as such term is defined in section 3(46) of such Act (47 U.S.C. 153(46) [now 153(53)]), and includes communications services (as defined in section 4251 of the Internal Revenue Code of 1986 (26 U.S.C. 4251)).“(10) “(A) The term ‘tax on Internet access’ means a tax on Internet access, regardless of whether such tax is imposed on a provider of Internet access or a buyer of Internet access and regardless of the terminology used to describe the tax.“(B) The term ‘tax on Internet access’ does not include a tax levied upon or measured by net income, capital stock, net worth, or property value.“(C) “(i) Effective “(I) was enacted after “(II) replaced, in whole or in part, a modified value-added tax or a tax levied upon or measured by net income, capital stock, or net worth (or, is a State business and occupation tax that was enacted after “(III) is imposed on a broad range of business activity; and “(IV) is not discriminatory in its application to providers of communication services, Internet access, or telecommunications.“(ii) Nothing in this subparagraph shall be construed as a limitation on a State’s ability to make modifications to a tax covered by clause (i) of this subparagraph after “(iii) No inference of legislative construction shall be drawn from this subparagraph regarding the application of subparagraph (A) or (B) to any tax described in clause (i) for periods prior to “SEC. 1106. ACCOUNTING RULE.“(a) If charges for Internet access are aggregated with and not separately stated from charges for telecommunications or other charges that are subject to taxation, then the charges for Internet access may be subject to taxation unless the Internet access provider can reasonably identify the charges for Internet access from its books and records kept in the regular course of business.“(b) In this section:“(1) The term ‘charges for Internet access’ means all charges for Internet access as defined in section 1105(5).“(2) The term ‘charges for telecommunications’ means all charges for telecommunications, except to the extent such telecommunications are purchased, used, or sold by a provider of Internet access to provide Internet access or to otherwise enable users to access content, information or other services offered over the Internet.“SEC. 1107. EFFECT ON OTHER LAWS.“(a) Nothing in this Act [probably means “this title”] shall prevent the imposition or collection of any fees or charges used to preserve and advance Federal universal service or similar State programs—“(1) authorized by section 254 of the Communications Act of 1934 (47 U.S.C. 254); or“(2) in effect on “(b) 911 Nothing in this Act [probably means “this title”] shall prevent the imposition or collection, on a service used for access to 911 or E–911 services, of any fee or charge specifically designated or presented as dedicated by a State or political subdivision thereof for the support of 911 or E–911 services if no portion of the revenue derived from such fee or charge is obligated or expended for any purpose other than support of 911 or E–911 services.“(c) Nothing in this Act [probably means “this title”] shall be construed to affect any Federal or State regulatory proceeding that is not related to taxation.“[SEC. 1108.“SEC. 1109. EXCEPTION FOR TEXAS MUNICIPAL ACCESS LINE FEE.
[Pub. L. 110–108, § 7,
[Pub. L. 108–435, § 8,
Pub. L. 104–104, title I, § 101(c), “(1) the designation and heading of each title of the Act shall be in the form and typeface of the designation and heading of this title of this Act [110 Stat. 61]; and“(2) the designation and heading of each part of each title of the Act shall be in the form and typeface of the designation and heading of part I of title II of the Act [110 Stat. 61], as amended by subsection (a).”
Pub. L. 97–259, title II, § 202,
Act July 29, 1954, ch. 647, 68 Stat. 587, established the Commission on Governmental Use of International Telecommunications to examine, study and report on the objectives, operations, and effectiveness of information programs with respect to the prompt development of techniques, methods, and programs for greatly expanded and far more effective operations in this vital area of foreign policy through the use of foreign telecommunications. The Commission was required to make a report of its findings and recommendations on or before
Act May 13, 1947, ch. 51, 61 Stat. 83, provided that nothing in this chapter, or in any other provision of law should be construed to prohibit United States communication common carriers from rendering free communication services to official participants in the world telecommunications conferences which were held in the United States in 1947.
Ex. Ord. No. 10460, eff.