Less than two days before its expiration, a bill to extend a moratorium on Internet access taxes for seven years was approved by the House on Tuesday. The tax ban, first approved in 1998 and twice renewed, was set to expire on November 1.
Although the House initially approved a four-year ban, last week the Senate passed a seven-year prohibition, despite massive support for a permanent ban. According to reports, more than a majority of the House, 238 House co-sponsors, would have voted for a bill that made the moratorium permanent.
Despite the strong support for a permanent ban both in the House and Senate, overarching concerns over the potential long-term impact on state and local governments forced a compromise.
Those concerned with the idea of a permanent ban, like David Quam, director of federal relations with the National Governors Association, says that with the Internet changing rapidly, the issue of a moratorium on Internet access taxes should have to be revisited periodically.
In addition to lengthening the ban, the legislation also contains a provision aimed at preventing state and local governments from implementing taxes beyond those charged on simple Internet access as well as prohibiting taxation on email and instant messaging services that are provided independently or aren't packaged with Internet access. The extension also exempts some states that approved taxes prior to the original enactment.
The bill is currently awaiting approval from President Bush.
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