|
|
By Brian Krebs
washingtonpost.com Staff Writer
Tuesday, November 25, 2003
A federal ban on Internet access taxes will not come up for renewal until sometime next year after the U.S. Senate failed to reach an agreement on the specifics of how it will be extended, congressional sources said today.
A spokeswoman for Senate Majority Leader Bill Frist (R-Tenn.) said that the congressional attempt to make the ban permanent failed after lawmakers' negotiations on the size and scope of the bill broke down.
The ban, which was first passed in 1998, expired on Nov. 1. The House of Representatives passed its own version of the ban in August.
Sens. Ron Wyden (D-Ore.) and George Allen (R-Va.) had hoped to include their bill to make the ban permanent in a massive $284 billion federal spending package, but the measure was left out of the final appropriations bill filed late this afternoon.
We do not expect any more action on this bill this year, said Wyden spokeswoman Carol Guthrie.
Supporters argue that the ban keeps Internet access affordable and entices more consumers to get online. The telecommunications sector and high-tech businesses have urged Congress to clarify that states cannot continue taxing Internet access technologies that were in their infancy five years ago, including DSL.
Congress was expected to complete action on the bill before lawmakers adjourn for the year, but several senators -- including Tom Carper (D-Del.), George Voinovich (R-Ohio) and Bob Graham (D-Fla.) -- managed to keep the Senate from voting on it. They said that the moratorium bill's language is so broadly written that it would free telecommunications carriers from a range of taxes that provide critical funding for state and local governments.
They say that new language in the bill could be interpreted to make all kinds of Internet services tax-exempt, including online movie and music downloads. They also are worried about losing revenues to Internet-based telephone services, which are becoming more popular. According to a September study by the Multistate Tax Commission, this could reduce state and local revenue bases by $8.75 billion annually by 2006.
Mike Waldron, a spokesman for Sen. Allen, said that the ban's lapse will allow state legislatures to tax Internet access, a move he said will hurt consumers.
Because the Senate failed to act, the taxing gates have now opened for states that wish to tax access to the Internet and DSL service, Waldron said.
There are only a few state legislatures in session at this time of year, making a sudden profusion of Internet access taxes at the state level unlikely. The Senate will try to reach an agreement on the ban early next year, but the chances of states trying to pass new taxes for the Internet increase as more legislatures open their annual sessions in January and February.
Several states that were allowed to collect taxes despite the original moratorium would lose that right under the new legislation. Those states -- Hawaii, New Hampshire, New Mexico, North Dakota, Ohio, South Dakota, Tennessee, Texas, Washington and Wisconsin -- could collectively lose between $80 million and $120 million a year in tax revenue, the Congressional Budget Office estimates. But the CBO said the states could lose substantially more tax revenue depending on how the bill was interpreted.
The Senate version would allow the states to continue collecting Internet access taxes for three years, while the House's bill would eliminate the practice as soon as it is signed into law.
The access tax is unrelated to a state-led effort to get congressional approval to collect taxes on almost all Internet sales.
© 2003 TechNews.com Source: WashingtonPostTech
|
|
|
 |
|
No Comments Allowed for Anonymous, please register |
|
| |
|
Login |
|
 |
|
|
|
|
· New User? · Click here to create a registered account.
|
|
|
Article Rating |
|
|
|
|
|
|
Average Score: 5
Votes: 1
|
|
|
