Congress Approves 7-Year Extension of Internet Access Tax Moratorium

Published December 1, 2007

Congress approved an extension of the national moratorium on Internet taxes one day before the previous moratorium was due to expire.

A measure protecting Internet access services from federal, state, and local sales or excise taxes for another seven years passed the House of Representatives 402-0 on October 30, following passage in the Senate by voice vote on October 25. President George W. Bush signed the bill November 1.

The final bill, the Internet Tax Freedom Act Amendments Act of 2007, was the result of a compromise reached during the House-Senate conference on the bill. Internet service providers (ISPs), Web-based businesses, and tax reform groups had been pressing Congress for a permanent ban.

The seven-year extension in the new law more than doubles the three-year term of past moratorium bills and represents a significant addition to the four-year moratorium in the bill passed by the House earlier in October.

The House-Senate conference also removed qualifying language that some felt would open the door to taxes on email and other Web-based services.

The extension represents “a great bipartisan victory that will benefit millions of consumers and businesses,” said Broderick Johnson, chairman of the Don’t Tax Our Web Coalition, in a press statement.

Steven Titch ([email protected]) is The Heartland Institute’s senior fellow for telecom and information technology and managing editor of IT&T News.