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Friday, November 19, 2004

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Latest Futures News: "Congress extends Internet tax ban -"

Congress extends Internet tax ban -
Friday, November 19, 2004 8:30:22 PM

WASHINGTON (AFX) -- Congress sent legislation to President Bush Friday that would reinstate a ban on Internet access taxes for three years, breaking a legislative stalemate

The House, which had previously insisted on a permanent tax moratorium, approved the temporary extension on a voice vote. Senate action earlier this week gave ground on certain provisions sought by House Republicans, clearing the way for final action. "The case for allowing Internet access to remain tax-free has never been stronger. A tax on the Internet would be a tax on working families," said Rep. Christopher Cox, R-Calif., an architect of the moratorium

The bill specifically bans taxes on Internet access. Double taxation by two or more states of an online transaction also would be barred, as would discriminatory levies that treat Internet purchases differently from other types of sales. The moratorium would be in place through Nov. 1, 2007. A 1998 federal moratorium barring states and local governments from imposing taxes on Internet access expired last November. While the House was quick to pass a permanent extension of the tax ban, action stalled in the Senate, where some argued that efforts to extend the ban to high-speed services would open loopholes that would starve states and municipalities of revenues

If legislators had been unable to complete work by the end of this week's post-election, lame-duck session, Congress would have been forced to start all over again next year

Telecom firms and Internet service providers both had big stakes in the outcome of the legislation. "Reinstating the tax moratorium will promote the adoption of broadband and ensure its affordability, and we are confident Congress will see the long-term benefits of this policy," said Peter Jacoby, top lobbyist for AT&T

The revised measure includes a proposal by House Judiciary Committee Chairman James Sensenbrenner, R-Wis., for a two-year exemption to the access-tax ban. The measure also provides a grandfather clause for a Texas utility law that includes access fees for telecommunications services. The clause allows Texas cities to continue collecting franchise fees from telecommunications companies for use of public lands

Otherwise, the legislation includes provisions designed to update the definition of Internet access to ensure that the moratorium applies to any type of access, including through DSL, dial-up, cable modem or wireless services. It also aims to ensure that the moratorium doesn't affect state and local taxation of voice telecommunications services, including voice over Internet protocol. This story was supplied by CBSMarketWatch. For further information see www.cbsmarketwatch.com

For more information and to contact AFX: www.afxnews.com and www.afxpress.com

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My name is Christian. I have been blogging since 2002, Family blog at Chris_and_Jenni.com Personal blog at Christian_Burns.wordpress.com