Senate Extends Internet-Tax Moratorium

Local Taxes on Internet Access Banned for Another Seven Years

By John Eggerton -- Broadcasting & Cable, 10/26/2007 9:52:00 AM

The Senate Thursday evening extended the moratorium on Internet taxes for another seven years.

Sens. John McCain (R-Ariz.) and John Sununu (R-N.H.) had pushed for a permanent moratorium in their original bill, but McCain called the seven-year hitch a "strong compromise."

The tax moratorium is set to sunset Nov. 1. It prevents local taxes on Internet access, including cable-modem service, as well as online transactions. The House passed a four-year extension earlier this month, so the two bills will need to be reconciled if the moratorium is to continue.

Congress has already twice extended the moratorium, which was established as part of the 1998 Internet Tax Freedom Act (http://www.gseis.ucla.edu/iclp/itfa.htm).

National Cable & Telecommunications Association president Kyle McSlarrow praised Sununu and Senate Commerce Committee co-chairmen Daniel Inouye (D-Hawaii) and Ted Stevens (R-Alaska) for their leadership on the effort, saying it "will protect consumers and small businesses from new and burdensome state and local taxes on Internet access."