Report: Internet taxes could reach $15 billion a year

Consumers would be forced to hand over $14.7 billion a year in new taxes if Congress doesn’t extend a ban on taxes for online access, according to new research from a group aligned with Republicans. 

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The American Action Forum reached that figure by projecting that states, if allowed, would essentially tax Internet access and data consumption roughly the same as they do wireless service.

The group said those taxes would hit struggling families the hardest and also hurt an important sector of the economy.

“With businesses and families already feeling the brunt of the high taxes and a slow recovery, a new tax could hurt this dynamic part of the economy,” the group wrote. 

The House passed a permanent measure to ban taxes on Internet access this summer, which would also end the exemption for states that enacted taxes before Congress passed the Internet Tax Freedom Act in 1998.

But on the other side of the Capitol, top senators from both parties have instead sought to tie a 10-year extension of the ban on Internet taxes to a more controversial measure that would give states more latitude to collect sales taxes on out-of-state purchases.

The Internet Tax Freedom Act was set to expire at the beginning of November, but lawmakers passed an extension into December, allowing Congress to hash out a longer-term measure after the midterm elections.

Extending the moratorium generally has bipartisan support in Congress, but some liberal groups say the ban has outlived its purpose and helps an industry that no longer needs the assistance.

The Tax Foundation, another pro-market group, has found that U.S. consumers pay around 17 percent in taxes and fees for their cellphones. Individuals would pay about two-thirds of the $14.7 billion in new taxes for Internet access projected by the American Action Forum, with businesses on the hook for the other third.