US Internet Tax Moratorium Extended For Seven Years

摘要

On October 31, 2007, one day before the ban on Internet taxation was to expire, President George Bush signed a seven year extension of the moratorium adopted a few days earlier by Congress. In addition to lengthening an earlier ban from four to seven years the legislation also contains a provision aimed at preventing stat and local governments from assessing taxes beyond those levied on simple Internet access. Prohibited are the taxing of emails and instant messaging services that may be provided independently or not packaged with Internet access. However, the extension also exempts some states that approved taxes prior to the original enactment. The House had adopted legislation that would make the moratorium permanent but concerns over the potential long-term impact on state and local governments forced a compromise. Because technology is rapidly changing, some legislators and interest groups believe this type of law should be subject to revision periodically. Earlier, Internet service providers expressed con- cerns that the price of Internet access could have increased by as much as 17% if the moratorium on state taxation had expired. Several Senators argued that a permanent ban on Internet taxes is needed to encourage more investment by broadband service providers.