Congress Blocks Taxation Of Internet Connections - InformationWeek

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Congress Blocks Taxation Of Internet Connections

Congress on Friday blocked state and local governments from taxing connections that link consumers to the Internet for the next three years.

"Enacting this legislation is a big win for the majority of American Internet users," said House Judiciary Committee Chairman James Sensenbrenner, R-Wis.

The bill, passed by voice vote and sent to the president for his signature, blocks taxation of all types of Internet connections, from traditional dial-up services to high-speed broadband lines.

States that had started taxing Internet access before the first ban, enacted in 1998, can continue collecting those fees. States that tax speedy DSL lines must start phasing out the levies. The tax moratorium ends in November 2007.

The House voted last year to permanently ban taxes on Internet access, but it could not find enough support in the Senate, despite a strong push from the telecommunications industry.

The bill also blocks multiple state and local taxes from being imposed on merchandise purchased over the Internet.

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