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Hopes Fade For Net Tax Ban Resolution In 2003

by Mike Godfrey, for LawAndTax-News.com, Washington

09 December 2003


The chances of a compromise being reached in the Senate before the end of this year over the extension of the lapsed internet access tax moratorium are becoming increasingly slim, according to reports in the US media this week.

Although the House of Representatives has passed legislation extending the moratorium on a permanent basis to all forms of internet access, and removing the grandfather clause contained within the temporary moratorium which allowed the 10 states which began to levy taxes on internet access prior to the enactment of the moratorium to continue to do so, a similar bill has been stalled in the Senate for some time now over concerns about the potential cost to state authorities.

Senator Lamar Alexander (R-Tennessee), one of the main opponents of the Senate bill, which is sponsored by Senators Ron Wyden (D-Oregon) and George Allen (R-Virginia), has put forward proposals whereby the language of the lapsed temporary moratorium would be extended by two years, and would be changed to cover DSL internet connections. However, the grandfather clause allowing his and other states to collect internet access taxes would remain.

Senators Wyden and Allen, meanwhile, have offered to amend their proposed bill so that the language remains the same, but the term is limited to between 3 and 5 years.

However, speaking to Internetnews.com, Senator Alexander's press secretary, Alexia Pope suggested that he was unlikely to give any ground on this issue in the foreseeable future:

"Sen. Alexander has already done a lot of compromising on this bill," she explained, adding that: "He went all the way from not wanting a moratorium at all to this compromise to extend the current moratorium."

Senator Wyden's communications director, Carol Guthrie was equally pessimistic, suggesting to the news service that:

"Senator Wyden would very much like to see a bill, the sooner the better, but it appears to be a task for next year. We don't expect any action before the end of the year."


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