US Congress Close to Extending Tax Moratorium on Internet Access

The US House of Representatives has passed a bill (HR 49) to permanently extend the moratorium on tax-free access to Internet services.   As originally signed into law in 1998, the moratorium was set to expire on November 1, 2003.   If approved by the Senate, the extended moratorium would ban state and local governments from imposing taxes on all methods to access the Internet and may even include a tax prohibition on bundled voice and Internet services. For a reference to some of the state laws which could be affected, see the June 19, 2003 issue of E-TIPS Vol. 2, No. 1 (Several US States Now Taxing Internet-Related Services).   HR 49 would eliminate a grandfathering exception, which currently allows several US states to continue collecting taxes for Internet access on the basis of state legislation which pre-dated the enactment of 1998 moratorium.   However, the bill does not apply to taxes on goods purchased over the Internet.   The US Senate is expected to consider the bill before November. http://www.washingtonpost.com/wp-dyn/articles/A23094-2003Sep17.html http://news.com.com/2100-1028_3-5077882.html http://www.siliconvalley.com/mld/siliconvalley/news/editorial/6794251.htm Summary by: Colin Adams