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President Barack Obama has signed federal legislation extending the Internet Tax Freedom Act (ITFA) through December 11, 2014 as part of the joint resolution which made continuing appropriations for fiscal year 2015. The ITFA was previously set to expire on November 1, 2014. The ITFA bars state and local governments from imposing multiple or discriminatory taxes on electronic commerce and taxes on Internet access.


For an update to this news item, see Internet Tax Freedom Act Extended Until October 1, 2015, Permanent Extension Introduced.


(P.L. 113-164 (H.J. Res. 124), 113th Congress, 2nd Session, Laws 2014)


District of Columbia Mayor Vincent Gray has signed legislation which enacts a click-through nexus provision. Within 120 days of the effective date of the legislation, the District will require every remote vendor (who doesn’t qualify as an exempted vendor) to register with the District, collect and remit sales tax on internet sales to buyers in the District. Before the District can require collection, it must pass local laws including the establishment of a registry, a small-vendor exemption, a means of determining the current District sales and use tax rate and taxability, the date that remote collection of remote sales tax will commence, product exemptions, and accounting rules, among other items. “Remote-vendor" is a seller, whether or not it has a physical presence or other nexus within the District, selling via the Internet property or rendering a service to a buyer in the District. For purposes of the legislation, "exempted vendor" is a remote-vendor that, in accordance with local law, has a specified level of cumulative gross receipts from internet sales to buyers in the District that exempts it from the requirement to collect remote sales taxes. We will continue to monitor the District activities to report on the enactment of the required provisions that will permit the enforcement of this provision. (Act 20-370 (D.C.B. 20-749), Laws 2014, approved July 11, 2014, effective after a 30-day congressional review period)


Representative Lamar Smith (Republican, Texas) has introduced a bill to bar multiple taxes on digital goods and services.  Smith had proposed an earlier bill which failed to pass.  This bill is a revised version of the earlier bill. The proposed bill – called the Digital Goods and Services Tax Fairness Act of 2013 – would only allow a state to tax sales of digital goods and services to customers with a tax address within that state. Additionally, states would be barred from imposing multiple taxes on digital goods. The bill defines digital goods as sounds, images, data and facts maintained in digital form. Internet access service is not included as a digital good in the bill. (H.R. 3724)


District of Columbia Mayor Vincent C. Gray has signed the Fiscal Year 2014 Budget Support Emergency Act of 2013, enacting a restaurant utilities exemption.Effective August 1, 2013, sales of natural or artificial gas, oil, electricity, solid fuel or steam directly used in a restaurant are exempt from sales tax. For purposes of the exemption, a "restaurant" is a retail establishment that is licensed by the District, a separately metered or sub-metered facility, and in the principal business of preparing and serving food to the public. The term "restaurant" includes a pizzeria, delicatessen, ice cream parlor, cafeteria, take-out counter, and caterer, and banquet and food-processing areas in hotels but does not include beverage counters, including coffee shops and juice bars. (Act 20-130 (D.C.B. 20-337), Laws 2013)


District of Columbia Mayor Vincent C. Gray has signed the Fiscal Year 2014 Budget Support Emergency Act of 2013, reducing the sales tax rate and increasing the use tax rate on specified alcoholic beverages. Effective October 1, 2013, the sales tax rate will decrease from 6% to 5.75%.  Effective October 1, 2013, the use tax rate on sales of spirituous or malt liquors, beers, and wine sold for consumption off the premises where sold increases from 9% to 10%.(Act 20-130 (D.C.B. 20-337), Laws 2013)



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