Groups Praise Extension of Internet Tax Ban

Small business groups praised the House vote this week that temporarily extended a moratorium on Internet access taxes.

In a 405-2 vote on Tuesday night, the House approved H.R. 3678 that extends the expiration date of Nov. 1, 2007 to November 2011. Reps. Anna Eshoo (D-Calif.), who sponsored a bill for a permanent ban, and Michael Turner (R-Ohio) voted against the measure.

The moratorium was created by the Internet Tax Freedom Act in 1998. It prevents state and local governments from taxing Internet access, including cable modems and Internet service over phone lines as well as wireless transmission services like those delivered via a BlackBerry.

The moratorium also prohibits taxes that treat products sold on the Internet differently from those in the physical world. It does not address the separate issue of putting sales taxes on goods purchased online.

Many state and local governments aren't happy about their inability to tax Internet access, citing concerns over revenue shortfalls.

The National Small Business Association praised the extension, saying "the policy of not permitting anti-Internet taxes -- including taxes on Internet access or taxes that discriminate against Internet transactions -- has enabled many small businesses to develop and grow their productivity, marketing, sales and customer relations all by using the Internet."

Kristie Darien, executive director of the legislative office at the National Association for the Self-Employed, said "keeping the current moratorium will ensure entrepreneurs will be able to stay connected until more comprehensive legislation can be drafted."

By Sharon McLoone |  October 18, 2007; 7:01 AM ET Regulation Legislation
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Wow i din't even know there was an attempt to tax the internet. This article is quite good, show both sides (sort of). Thanks. :)

Posted by: Mike | October 18, 2007 11:59 AM

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