IV 

116TH CONGRESS 

2D SESSION H. RES. 1097 

Expressing strong opposition to the imposition of digital services taxes by 

other countries that discriminate against United States companies. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 1, 2020 

Mr. ESTES (for himself and Mr. KILDEE) submitted the following resolution; 

which was referred to the Committee on Ways and Means, and in addition to the Committee on Foreign Affairs, for a period to be subsequently 

determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

RESOLUTION 

Expressing strong opposition to the imposition of digital services taxes by other countries that discriminate against 

United States companies. 

Whereas a digital services tax (DST) is a tax levied by a government on a company that provides a digital service to 

a person or company of that country; 

Whereas many companies that provide digital services are not 

physically located in the countries where the people that 

use the company’s services reside; 

Whereas, under current international income tax and trade 

agreements, multinational companies are subject to taxation in the country where production of the good or 


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•HRES 1097 IH 

service occurs rather than in the country where the good 

or service is sold or used; 

Whereas certain countries have developed DSTs that deviate 

from this international income tax system that are discriminatory to United States-based companies and 

threatens the success of United States companies and 

workers and their competitiveness in these international 

markets; 

Whereas many countries, including France and others, have 

already implemented a DST; 

Whereas the Organisation for Economic Co-operation and 

Development (OECD) has hosted multilateral negotiations with 144 countries to propose a framework for updating global tax rules and address the concerns of some 

countries about digital economy taxation on a multilateral basis, and the United States is participating in these 

negotiations; 

Whereas the international tax treaty network promotes American prosperity by facilitating international trade and allows United States businesses and consumers to avoid 

double taxation; 

Whereas, on July 24, 2019, France passed legislation that 

retroactively levied a DST beginning January 1, 2019; 

Whereas section 302(b)(1)(A) of the Trade Act of 1974 authorizes the United States Trade Representative to initiate an investigation to determine whether an act, policy, 

or practice of a foreign country is actionable under section 301 of the Trade Act of 1974; 

Whereas actionable matters under section 301 of the Trade 

Act of 1974 include, inter alia, acts, policies, and practices of a foreign country that are unreasonable or disVerDate Sep 11 2014 02:04 Sep 02, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6300 E:\BILLS\HR1097.IH HR1097

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•HRES 1097 IH 

criminatory and burden or restrict United States commerce; 

Whereas an act, policy, or practice is unreasonable if the act, 

policy, or practice, while not necessarily in violation of, 

or inconsistent with, the international legal rights of the 

United States, is otherwise unfair and inequitable; 

Whereas in response to France’s DST, the United States 

Trade Representative (USTR) published the ‘‘Report on 

France’s Digital Services Tax Prepared in the Investigation under Section 301 of the Trade Act of 1974’’ on December 2, 2019; 

Whereas the report made five main findings, including— 

(1) that ‘‘the evidence collected in this investigation 

indicates that the French DST is intended to, and by its 

structure and operation does, discriminate against U.S. 

digital companies’’; 

(2) that ‘‘the evidence collected in this investigation 

indicates that the French DST’s retroactive application is 

unusual and inconsistent with prevailing tax principles 

and renders the tax particularly burdensome for covered 

U.S. companies, which will also affect their customers, 

including U.S. small businesses and consumers’’; 

(3) that ‘‘the evidence collected in this investigation 

indicates that the French DST’s application to gross revenue rather than income contravenes prevailing tax principles and imposes significant additional burdens on covered U.S. companies’’; 

(4) that ‘‘the evidence collected in this investigation 

indicates that the French DST’s application to revenues 

unconnected to a presence in France contravenes prevailing international tax principles and is particularly 

burdensome for covered U.S. companies’’; and 


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(5) that ‘‘the evidence collected in this investigation 

indicates that the French DST’s application to a small 

group of digital companies contravenes international tax 

principles counseling against targeting the digital economy for special, unfavorable tax treatment’’; 

Whereas, in light of concerns with the DSTs adopted or 

under consideration by foreign countries, on June 2, 

2020, the United States Trade Representative initiated 

section 301 investigations with respect to DSTs adopted 

or under consideration by Austria, Brazil, the Czech Republic, the European Union, India, Indonesia, Italy, 

Spain, Turkey, and the United Kingdom; 

Whereas, pursuant to section 303(a) of the Trade Act of 

1974, the United States Trade Representative has requested consultations with the governments of these jurisdictions; and 

Whereas the United States Government has many options to 

oppose DSTs, including intensive bilateral engagement, 

withdrawal of trade preference programs, World Trade 

Organization dispute settlement, or imposing duties, fees, 

import restrictions, or taxes on the goods or services of 

countries that unfairly target United States companies: 

Now, therefore, be it 

1 Resolved, That the House of Representatives— 

2 (1) is committed to free and fair trade between 

3 the United States and other countries; 

4 (2) agrees with the findings of the report issued 

5 by the United States Trade Representative on De6 cember 2, 2019, that concludes that the French dig7 ital services tax (DST) discriminates against United 


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1 States companies and is in violation of existing 

2 international income tax and trade agreements; 

3 (3) supports the Office of the United States 

4 Trade Representative for continuing its investiga5 tions into discriminatory DSTs through its notice of 

6 investigations issued on June 2, 2020; 

7 (4) calls on all other countries to cease and de8 sist from implementing any DST, and to imme9 diately stop unfairly targeting United States compa10 nies; 

11 (5) calls on all countries to continue to work to12 wards consensus with the Organisation for Economic 

13 Co-operation and Development (OECD) to address 

14 the tax challenges of a global, digitalized economy; 

15 and 

16 (6) calls on the relevant United States Govern17 ment agencies to use all available methods and re18 sources to protect United States companies from the 

19 discriminatory effects of DSTs. 

Æ 


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