The Congress on Friday passed legislation reinstituting a ban on state and local taxation of Internet access for another three years following a vote by the House of Representatives.
The legislation must be signed into law by President Bush, who has emphasized in speeches the government must not tax Internet access.
The moratorium applies to all types of Internet technologies, including dial-up, DSL, cable modem and wireless service.
U.S. Sen. Ron Wyden (D-Ore.) said in a news release the Internet Tax Non-Discrimination Act bans three types of taxes: taxes on Internet access; double taxation by two or more states of a product or service purchased over the Internet; and discriminatory taxes that treat Internet purchases differently from other types of sales.
The legislation includes grandfather clauses for states that taxed Internet access in 1998 or are currently taxing high-speed wireline and wireless Internet access.
Congress passed a temporary moratorium in 1998 restricting taxation of Internet access, but it expired last November. A ban on Internet taxes expires in three years under the current legislation.
Telecommunications associations and companies today praised Congress for passing the Internet Tax Non-Discrimination Act.
“In today’s information-based economy, this legislation ensures that consumers will benefit from more competition, increased investment and new innovative services,” said Walter B. McCormick, Jr., president and CEO of the United States Telecom Association. “Extending the Internet access tax ban brings more clarity to today’s rapidly changing communications market and we appreciate Congress’ efforts to enact this important legislation.”
