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Federal Update: Internet Tax Freedom Act, 2016 Appropriations

Permanent Extension of Internet Tax Freedom Act on Hold, But Cities Should Remain Vigilant

December 18, 2015
Congress last week moved to make the Internet Tax Freedom Act (ITFA) permanent when a conference committee included it in an unrelated Customs Reauthorization Conference Report. 
Cities and other stakeholders responded in force and were able to avoid the passage before the winter break. Instead a temporary extension of the ITFA will be included in the annual Appropriations Omnibus bill that will be passed this week. The omnibus bill extends the ITFA through October 2016.

While this action relieves some of the pressure on the Senate to pass a permanent extension, cities need to remain vigilant. The provisions remain in the Customs bill, and have already been approved by the House. It could come up for a vote with little notice after the Senate reconvenes on Jan. 11.
If your city has a letter in process, email remains the best way to contact California Sens. Barbara Boxer and Deanne Feinstein to urge them to oppose the Customs bill, officially known as the Trade Facilitation and Trade Enforcement Act of 2015. Cities can use the League’s letter as a sample, and sent the emails to, and

Congress Approves 2016 Appropriations Bills
As mentioned above, Congress this week approved the 2016 Appropriations Omnibus Bills. As part of that agreement, Congress will delay the implementation of what is known as the Cadillac tax, an Affordable Health Care Act (ACA) tax on high-cost employer-paid health insurance plans. Instead in the Omnibus spending bill approved by the House and sent to the Senate, the excise tax has been delayed for two more years.
Under the bill, the tax would not be effective until 2020, instead of its scheduled 2018 implementation date. The tax is supposed to generate revenue for the ACA. In addition, under the agreement, the medical device tax is suspended for two years and the tax on health insurers is suspended for one year.

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