One More Step Towards Extending the Internet Tax Moratorium

30 Oct

From Ars Technica: The House of Representatives has passed the Senate’s version of legislation that would extend the ban on Internet access taxes by seven years. The House had previously approved a four-year extension, but some representatives wanted to see the moratorium made permanent, and the Senate’s seven-year ban was a compromise so good that it passed by a 402-0 margin.

State and local governments had opposed making the ban on taxes permanent. The National Governors Association had urged Congress to pass a “reasonable extension” that would “promote Internet usage,” but argued against keeping the ban in place indefinitely. Once broadband connections are as commonplace as stoves and refrigerators, proponents of a temporary ban argue, the question of whether ‘Net access should be taxed should be revisited, as they could prove a lucrative source of funding for state and local governments

Nine states that enacted access taxes prior to the original passage of the Internet Tax Freedom Act in 1998 continue to be exempt from the ban. In addition, a prohibition against taxing e-mail and instant messaging services that are “not packaged with Internet access” was inserted into the bill by Sen. Ron Wyden (D-OR). The bill’s passage by the House marks the third time the moratorium has been extended. It was first extended in 2001, and then again in 2004.  It is currently slated to expire on November 1. The legislation will now go to President Bush, who is expected to sign it into law.


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