What is the Internet Tax Freedom Act (ITFA) moratorium?
In October 1998, Congress passed the Internet Tax Freedom Act (ITFA), implementing a 3-year moratorium on new Internet access taxes or new discriminatory taxes on electronic commerce. The moratorium, which expires on October 1, 2001, does not address the current sales and use tax loophole that allows out-of-state sellers to avoid collecting a state’s sales tax. This legislation also created the Advisory Commission on Electronic Commerce (ACEC) to consider issues associated with the taxation of sales purchased on the Internet. The Commission completed its work in April of 2000 and attempted to issue findings to Congress. Unfortunately, the Commission was unable to reach the two-thirds vote required by Congress to make any official findings or recommendations on these matters. Traditional in-store retailers who conduct the majority of retail sales in this country were excluded from the ACEC, despite statutory language mandating their participation. Therefore, it should be no surprise tha
