Bill for moratorium on Internet taxes approved

A U.S. House subcommittee has approved a bill that would permanently extend a moratorium on some Internet taxes, including Internet access taxes, despite Democrats’ concerns over the effect on mom-and-pop businesses and whether the bill ensures a tax ban on DSL access.

The Internet Tax Nondiscrimination Act prohibits the 7,500-plus taxing jurisdictions in the U.S. from creating taxes unique to the Internet, including bit taxes, which tax Internet information as it moves across servers in many taxing jurisdictions. A current moratorium on such taxes, first passed in 1998, expires Nov. 1, and the U.S. House Judiciary Committee’s Subcommittee on Commercial and Administrative Law voted to send the bill on to the full committee with a recommendation of passage.

Subcommittee Chairman Chris Cannon (R-Utah) pushed for the bill by saying an Internet access tax would hurt ISPs and hinder the growth of e-commerce, which makes up about 1 per cent of U.S. retail sales, during a time when the Internet sector is struggling.