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U.S. Senator from Oregon
The 1998 Internet Tax Freedom Act is a United States law authored by Representative Christopher Cox and Senator Ron Wyden, and signed into law as title XI of Pub.L. 105–277 on October 21, 1998 by President Bill Clinton in an effort to promote and preserve the commercial, educational, and informational potential of the Internet. The law bars federal, state and local governments from taxing Internet access and from imposing discriminatory Internet-only taxes such as bit taxes, bandwidth taxes, and email taxes. It also bars multiple taxes on electronic commerce.
One of the principal sponsors of the Act argued that the law also codifies the U.S. Supreme Court's Quill Corp. v. North Dakota decision and stipulates that no state shall collect a sales tax from retail purchases made over the internet or through a mail-order catalog unless the seller has a physical presence in the state attempting to collect such tax. If a seller does have a physical presence in a state, then that seller may be required to collect the same state and local sales taxes as those collected on non-Internet sales. The Act did not repeal any state sales or use tax. The U.S. Supreme Court's Quill Corp. v. North Dakota was overturned in June 2018 by South Dakota v. Wayfair.
The 1998 law also authorized the establishment of a study commission to study national tax policy with regard to the Internet. The Advisory Commission on Electronic Commerce studied the issue from 1999 to 2000. The Commission was chaired by then-Virginia Governor James S. Gilmore, III, who led a majority coalition on the Commission to issue a final report opposing taxation of the Internet and eliminating the federal excise tax on telecommunications services, among other ideas.