House extends Internet tax ban
The controversial act would extend the current ban on Internet taxes until 2006
The House of Representatives voted Wednesday to extend the current ban on
Internet taxes to October 21, 2006. The bill now heads to the Senate where
it is not expected to pass.
The Internet Non-Discrimination Act extends the ban, which ends October
1, 2001, on new taxes and ones aimed specifically at the Internet. It does
not ban sales taxes on electronic commerce.
The bill passed 352 to 75, with seven representatives not voting. An
attempt to extend the ban for only two years failed. The White House issued
a statement earlier in the day backing a two-year extension, saying it could
delay work on Internet sales taxes.
The bill also eliminates a clause that grandfathered several jurisdictions
that were taxing the Internet before the ban.
Taxing the Internet has been widely debated recently. Last month, The
Advisory Commission on Electronic Commerce presented its report that recommended
extending the ban five years.
However, most state and local officials, including 42 governors who
signed a letter opposing the report, say it misrepresents the commission.
Congress mandated that any recommendations garner a two-thirds vote, not
the simple majority the commission received.
The dissenters believe Internet businesses are getting an unfair advantage
because of the ban, and feel that traditional bricks-and-mortar stores are
being hurt. They also believe that the loss in tax revenue hurts state and
NEXT STORY: Senate sheds light on State security problems