On October 16, 2007, the US House of Representatives approved legislation to extend a moratorium on state Internet access taxes for four years, ignoring requests by some lawmakers for a permanent ban. Similar legislation has been delayed in the Senate Energy and Commerce Committee over a disagreement on whether to extend the ban temporarily or permanently.
The House voted 405-2 to extend the ban, which is set to expire on November 1, drawing criticism from many Republicans who argue that a permanent ban on Internet taxes is needed to urge more investment by broadband service providers. They complained that House Democratic leaders had blocked a vote on a permanent moratorium.
Backed by the National Governors Association, the four-year extension contains a "grandfather" clause that would allow those states that already had a tax enacted in 1998 to continue enforcing Internet taxes. The state tax ban has been in place since 1998, and received a three-year renewal by Congress in 2004.
Internet service providers said Internet access prices could increase as much as 17 percent if the moratorium on state taxes were allowed to expire. And while they had preferred a permanent Internet tax ban, the ISPs say they welcomed the House vote for a four-year extension.
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