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US Senate Votes For 7 Year Internet Tax Moratorium

by Mike Godfrey, Tax-News.com, Washington

29 October 2007


The United States Senate has approved legislation that would result in the current moratorium on internet access taxes being extended for seven years.

“This agreement is a common sense victory both for internet users and for state and local governments," Senators Tom Carper (D-Del.) and Lamar Alexander (R-Tenn.) said in a joint statement issued after Thursday's voice vote.

"It continues the moratorium on Internet taxation, avoids unfunded federal mandates on states and cities, updates the definition of Internet access, and allows Congress to revisit the issue after seven years," they added.

The current internet tax moratorium is set to expire on November 1. However, the House of Representatives has approved legislation that would extend the moratorium for just four years, and both bills will need to be reconciled before the tax ban can be extended.

The internet tax moratorium was first passed by Congress in 1998, but has had to be renewed twice in the meantime, the last time in 2004, for three years. While there is widespread support outside of Congress for the moratorium to be made permanent, there has been an apparent lack of enthusiasm for such a move among lawmakers. Indeed, an amendment added to the Senate Amtrak Authorization Bill by New Hampshire Republican John Sununu to make the internet tax moratorium permanent was rejected.

“I think it's important that we address this issue," stated Senate Republican Leader Mitch McConnell. "I know it is important to many senators. I think there is bipartisan support for a permanent ban, for continuing the moratorium forever."

Sununu however, blames the Senate Democrat leadership for the lack of action on the issue, accusing it of being "uninterested in protecting Internet users from higher taxes".


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