Congress Friday reinstated the ban on Internet access taxes after the House of Representatives agreed to extend it for another three years, according to wire service reports.
“We are pleased that Congress has passed this important legislation,” said Direct Marketing Association spokesman Louis Mastria. “This legislation will help bridge the digital divide and bring America back to the vanguard of Internet availability and usage. This will enable the Internet to grow in the U.S. as a vehicle for commerce, communication, and education.”
As Congress neared adjournment for the year, the House passed by voice vote a Senate bill that prevents state and local governments from taxing the monthly fees Internet providers like EarthLink Inc. charge their customers.
The Bush administration is expected to sign it into law.
The ban, in place since 1998, expired last year amid predictions that cash-strapped states could choke the growth of the Internet.
The House voted last year to make the moratorium permanent, ensure that it applied to high-speed “broadband” service and phase out existing state taxes.
Last spring, the Senate voted 93-3 to restore a ban on taxing Internet connections but stopped short of the permanent measure that was approved by the House (Direct Newsline, June 1).
Congress first blocked state and local taxes on the services that connect consumers to the Internet in 1998. The ban lapsed last November while lawmakers tried to rewrite it and cover broadband high-speed and wireless connections.
The measure would also allow states to tax online phone service, but the Federal Communications Commission recently ruled that only the federal government has that authority.
