Questions Loom for Internet Tax Measure as Customs Reauthorization Bill Stalls in Senate
Disagreements whether a proposed permanent ban on Internet access taxes should have been included in customs reauthorization legislation have left the bill stalled in the Senate and fogged up the prospect for quick movement of the trade legislation on the Senate floor. Because that language was inserted into the act’s conference report after being omitted from the original customs bills passed by the House and Senate, it could be subject to a point of order, which supporters of the ban would need 60 votes to waive, said a lobbyist and congressional staffer. The House passed the bill, Trade Facilitation and Trade Enforcement Act (HR-644), Dec. 11, but the Senate hasn't scheduled a vote on the bill.
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Any changes to the conference report would nullify the House’s passage of the bill this month (see 1512110058) and would have to be ratified by both chambers before it’s signed into law. An aide to Ron Wyden, D-Ore., the top Senate Democrat on the bill’s conference committee, expressed confidence the waiver would succeed. “If it comes to a vote on taxing the Internet, we think we'll win,” the aide said. The leaders of CTIA, NCTA and USTelecom recently voiced support for the Internet legislation (see 1512140054).
A point of order would have to be raised after the bill is on the Senate floor, and if the parliamentarian agrees with the motion, a vote would be taken whether to waive the point of order, a congressional staffer said. The Senate would need 60 votes to waive it. If a point of order is recognized, the bill could go back to the House, where lawmakers could be forced to change the language, said Jon Kent, a lobbyist for the National Customs Brokers & Forwarders Association of America (NCBFAA), which is following the issue closely and opposes some major provisions of the bill. “They’re not going to waive the point of order, and I think the point of order is well-grounded, as the provision was not included in the original bills that were passed,” he said.
The National Retail Federation, which pushed for completion of the customs bill by the year's end but since has said it opposed the Internet tax measure, didn't know the Permanent Internet Tax Freedom Act (PITFA) would be included in the conference report, said Jon Gold, NRF vice president-supply chain and customs, in an email. The provisions were added at the end of conference deliberations, which left the NRF and its members largely unaware until it was publicly released, said Gold. He said NRF doesn’t oppose PITFA itself, but is concerned about its forward movement without the Marketplace Fairness Act (MFA), e-fairness legislation in Congress that would allow state governments to collect Internet sales taxes, or something similar. That language was left out of the customs reauthorization package.
The concern from certain industry officials and lawmakers that the included Internet tax provision in the bill isn't sufficient is the main issue delaying the bill, said Kevin Dempsey, general counsel for the American Iron and Steel Institute, which supports the customs bill. Still, AISI is "confident" the Senate will address the Internet tax provisions in January, with a vote to likely a week later. The NRF also recently expressed optimism that the House will schedule a floor vote on the MFA or related legislation next year. “The Internet Tax Freedom Act will expire in October 2016 unless Congress acts next year; we believe this will set up an opportunity to finally move forward with e-fairness legislation,” NRF said.
While prospects for a vote on e-fairness might be getting clearer, certainty for a Senate customs reauthorization vote in January might be weakening, said Kent. Legislation that enters recesses unresolved can languish and if the Senate doesn't immediately revisit the reauthorization legislation upon returning in January, a vote could get pushed to the spring, he said. “You get into January, and there’s no momentum for anything,” he said. “There’s not much legislation that goes to the floor. It takes a while for their energy to come back, and so what is the propelling factor that makes this bill so important all of the sudden in January?”