A European Union panel has agreed to a proposal that would allow member states to charge value-added taxes on digital products sold through the Internet, according to wire service reports.
The proposal, originally issued in June 2000, has irked U.S. lawmakers who worry that a European online VAT would hurt U.S. Internet sales of such products as computer games, software and music.
All U.S. Internet taxes are on hold until 2003.
The Council of Economics and Finance Ministers also said it plans to finalize the VAT proposal text for approval its next meeting in February.
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