OT: Internet Taxes - Senate Approves Extension of Ban For 7 More Years

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Senate Approves Extension of Internet Tax Ban Fri Oct 26, 2007 12:18pm EDT

 

By Peter Kaplan

 

WASHINGTON (Reuters) - The Senate has approved legislation extending a

moratorium on state Internet access taxes for seven years.

 

With only days left before the Internet tax ban was set to expire, the

Senate reached a compromise between lawmakers who proposed a shorter

extension and those who insisted it should be made permanent.

 

" By keeping the Internet tax-free and affordable, Congress can encourage

Internet use for distance learning, telemedicine, commerce and other

important services, " Sen. Ted Stevens, of Alaska, said in a statement on

Thursday night.

 

The vote came about two weeks after the House of Representatives approved a

four-year extension of the Internet tax ban.

 

The two chambers must work out their differences on the bill before a final

version can be approved and signed by President George W. Bush.

 

On Friday, Bush listed the Internet tax ban extension among a list of tasks

that Congress had failed to accomplish.

 

" I urge Congress to keep the Internet tax-free -- and to get a bill to my

desk that I can sign, " Bush said.

 

The state tax ban has been in place since 1998. It was last renewed by

Congress in 2004 for three years. It is scheduled to expire on November 1.

 

Internet service providers say the price of Internet access could rise by as

much as 17 percent if the moratorium on state taxes were allowed to expire.

 

Some senators, including many Republicans, had argued that a permanent ban

on Internet taxes is needed to spur more investment by broadband service

providers. They complained that Senate Democratic leaders had blocked a vote

on a permanent moratorium.

 

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