Internet Tax Freedom Act becomes permanent and ends Ohio’s ability to tax Internet access in 2020

President Obama signed H.R. 644 on February 24, 2016 which permanently bans state and local taxes imposed on Internet access and discriminatory taxes on Internet commerce. The original moratorium on such taxes, enacted by the Internet Tax Freedom Act and extended multiple times (IFTA), was set to expire on October 1, 2016. The IFTA included a grandfather clause which allowed states taxing Internet access at the time the bill was enacted to continue to do so. Ohio was one of those states. However, the permanent ban ends the ability of these grandfathered states to continue taxing Internet access as of June 30, 2020. Reportedly, Ohio collected $65 million from this tax in 2014. Obviously, Ohio will need to plan on how to make up this revenue loss.