Released: October 17, 2007

House votes to extend ban on Internet taxes

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

Fear about future tax revenue shortfalls at the state and local levels helped derail a congressional push Tuesday for a permanent federal ban on Internet access taxes. Instead, a nearly unanimous House voted for a more modest four-year moratorium.

With the current moratorium set to expire at the end of the month, the House voted 405 to 2 to extend the politically popular exemption until 2011. Although there is a strong bipartisan consensus that Internet access should be tax-free, the length of the extension remains controversial as the types of services available online continue to evolve. That threatens to stall the legislation in the Senate.

“We should have a permanent ban on taxation of the Internet,” Senate Minority Leader Mitch McConnell (R-Ky.) said shortly before the House voted.

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