Released: September 27, 2007

Clash over Internet access tax heats up

Source: Jim Puzzanghera, Los Angeles Times (Free Registration)

A monthly phone bill of $50 now includes as much as $10 in taxes. And some in Congress warn that consumers soon could be hit with similar assessments for high-speed Internet access.

For nearly a decade, the lines carrying the Internet into homes and businesses have been a virtual tax-free zone. But that could change Nov. 1 when a federal ban on Internet access taxes expires.

Almost everybody agrees that the politically popular moratorium should be extended to encourage continued investment in the high-speed lines crucial to making new online activities possible, particularly video. But changing Internet usage has complicated the issue, threatening to derail an extension and raising the specter of local officials engaging in a land-rush-like race to enact new taxes for surfing the Web.

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