A group of U.S. Senate Republicans and Democrats together was expected February 11 to try breaking a logjam over whether going online would stay tax-free, with a reported ten Republicans and Democrats planning to introduce a bill extending a moratorium on Net access taxes two years.
And, according to The Washington Post, the new bill's sponsorship includes two who first tried to block an extension to the moratorium that expired late in 2003: Sens. Lamar Alexander (R-Tennessee) and Thomas R. Carper (D-Delaware). And the new bill has heavyweight enough support from Sen. Ernest F. (Fritz) Hollings (D-South Carolina), the senior Commerce Committee Democrat, and influential Sen. Kay Bailey Hutchison (R-Texas).
The previous Net access tax moratorium's renewal has been tied up in a battle over whether to make the ban permanent and how much it might cost states in lost tax revenues.
Alexander and Carper had argued the original extension would cost states up to $9 billion by 2006, the Post said, because it would likely have included eliminating taxes on just about all telephone service with Internet telephony picking up more steam. The two former governors want the access tax ban applied only to those fees you pay your Internet service providers, not to the businesses running the telecommunications network enabling both telephone and Internet service, the paper added.
The new proposal would make a two-year access tax ban extension while continuing to permit the 25 states now taxing DSL Net access to do so – as they were allowed under the original moratorium because that took effect before it was widely available to consumers and uses telephone lines, as opposed to cable modem Net access, the Post said.
The sponsors of the original permanent Net access tax ban, Sens. George Allen (R-Virginia) and Ron Wyden (D-Oregon), reject the arguments that their plan would strip states of taxing all telecommunications, the paper continued. The two lawmakers also say DSL should not be taxed differently than other Net access services and methods. Wyden also calls the new bill a provider of more tax collection loopholes.
