Once again, the Internet Tax Freedom Act (“ITFA”) moratorium on state and local government taxation of Internet Access Services was extended. This time, until October 1, 2016, as part of the recently enacted omnibus compromise appropriations bill that was signed into law this past Friday. Hopes were high for a permanent extension of the moratorium, including a phase-out of the existing “grandfathered” states, which are permitted to tax Internet Access Services. The permanent ban will have to wait until next year for consideration.

However, although the ITFA was extended, we urge clients not to rejoice until they have confirmed that their service offerings do, indeed, qualify under the express language of the Act. Despite popular misconception, the moratorium on taxing Internet Access Services is not an all-encompassing, blanket panacea that protects ALL services offered over the Internet or using an Internet connection from taxation.

The CommLaw Group recently published an article in TMCnet’s SIP Trunking Report detailing the limits of the ITFA. We invite you to review the article and if you have questions about whether your company’s services qualify for exemption from taxation under the ITFA or not, please contact the author of the article, Jonathan S. Marashlian at jsm@commlawgroup.com or, in the alternative, contact the attorney assigned to your account. Full article linked below:

A Permanent Internet Tax Freedom Act May Shield Your Revenue, But Not Completely