Vote For Limited Ban on Internet Tax Passes

This afternoon the House voted 405 - 2 to keep a ban on internet taxation, but only for 4 years, and the bill still has to go the the Senate for approval. TN Senator Lamar Alexander is pushing a bill that keeps the ban in place for 4 years, then allows for cities and states to start piling on taxes.

Michael Silence notes the news here.

Some states, like Texas, already have a tax on internet access, which the new legislation keeps intact. The cost for Texas residents? 25 dollars a month tacked on to the price to access the Web.

Meanwhile, the US Treasury Secretary and the Secretary of Commerce say a permanent ban needs to be the priority:

"U.S. Treasury Secretary Henry M. Paulson and Commerce Secretary Carlos M. Gutierrez issued a statement today calling on Congress to make permanent the moratorium on Internet access taxes and on multiple or discriminatory taxes on electronic commerce. ...

"Although we recognize that a temporary extension is better than letting the moratorium expire, we are extremely disappointed that the legislation does not extend permanently the moratorium on Internet access taxes and on multiple or discriminatory taxes on electronic commerce. The Internet is an innovative force that opens up the vast potential economic and social benefits of electronic commerce.

"Preventing the taxation of Internet access and keeping the Internet free of multiple or discriminatory taxes will help sustain an environment for innovation, help ensure that consumers continue to have affordable access to the Internet, and strengthen the foundations of electronic commerce as a vital and growing part of our economy."

For more info, see yesterday's post.

UPDATE: I received the following press statement from Senator Alexander's office this afternoon:

"WASHINGTON- U.S. Senators Tom Carper (D-DE) and Lamar Alexander (R-TN) issued the following response to the vote by the U.S. House of Representatives to approve a four-year extension of a moratorium on state and local taxes on Internet access. The first tax ban was passed in 1998 and the current moratorium is set to expire on Nov. 1. This extension exempts some states that approved taxes prior to the original enactment.

“By extending the Internet tax moratorium four years, the House of Representatives has protected internet users. The Senate should follow suit with a temporary extension of the moratorium before the current moratorium expires on November 1. We’ve said from the start that a permanent ban is not good public policy. Rather, Congress should periodically look at this law to make sure it keeps pace with new technologies. Since the moratorium was enacted in 1998, we’ve extended it twice while changing the law substantially to meet changing technology.”

Carper and Alexander are cosponsors of similar legislation in the U. S. Senate. The measure passed the House by a vote of 405-2."