Senate OKs bill to forbid Internet-access tax


The Senate Commerce Committee Thursday approved legislation that would forbid
states from imposing taxes on Internet-access connections.

Committee chairman John McCain (R-Ariz.) cautioned, however, that the bill needs
reworking before it reaches the Senate floor because it doesn't adequately spell
out how connections of bundled Internet/telephone services would be handled.

"We'll work together to make sure it's plainly clear," agreed Sen. George
Allen (R-Va.), the bill's lead sponsor, who wanted to clarify that internet
access over cable and wi-fi is exempt from taxes.

State access taxes in place before October 1998 would be permitted to
continue until Oct. 1, 2006.

Plans to create a unified system for collecting state sales taxes for online
transactions will be handled in a separate bill this fall.