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RealTime IT News

Bill Extending Internet Tax Ban Goes to Bush

The House of Representatives approved legislation on Tuesday extending a moratorium on state Internet access taxes for seven years, sending the bill to the president to sign into law.

The state tax ban has been in place since 1998 and is scheduled to expire Nov. 1. Internet service providers say the price of Internet access could rise by as much as 17 percent if the moratorium on state taxes was allowed to expire.

The House approved by 402-0 the bill, which includes a longer moratorium extension than the four-year extension the chamber earlier endorsed. The latest version of the House legislation is identical to that already approved by the Senate, so the bill next goes to President George W. Bush, who is expected to sign it into law.

Verizon and other companies expressed relief that Congress acted before the deadline.

"Broadband access is now a crucial driver of America's economy, and this moratorium extension will ensure continued investment and growth in the broadband marketplace," said Peter Davidson, a Verizon senior vice president.

Some lawmakers, including many Republican senators, had sought a permanent ban on Internet taxes to spur more investment by broadband service providers.

Sen. John Sununu, a New Hampshire Republican who wrote the seven-year extension compromise, said he still hopes to permanently end the tax.

"I will continue to fight for a permanent ban on access taxes, but this is a strong step forward. Taxing the Internet is wrong for consumers and wrong for the economy," Sununu said in a statement after the House vote.