Eshoo introduces Permanent Internet Tax Freedom Act

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House Rep. Anna G. Eshoo, D-CA, has introduced the Permanent Internet Tax Freedom Act of 2007 , which seeks to permanently extend the moratorium on Internet access taxes and duplicative taxes on e-commerce.

Congress first instituted the temporary moratorium in 1998 to encourage growth of online commerce. In 2004, Congress extended the moratorium for an additional three years, which is scheduled to expire Nov. 1.

The moratorium applies to a variety of Internet services, including DSL (digital subscriber line), cable modem and other wireless transmission services.

"Passage of this legislation will ensure, once and for all, that the growth of Internet access and e-commerce will not be hampered by unwarranted taxation," Rep. Eshoo said in a statement.

She is a member of the House Energy and Commerce Subcommittee on Telecommunications and the Internet.

The bill, H. 156, would forever prohibit three types of Internet taxes: taxes on Internet access, double taxation (for example, by two or more states) of a product or service bought over the Internet, and discriminatory taxes that treat Internet purchases differently from other types of sales.

Co-sponsored by Rep. Bob Goodlatte (R-VA.), the bill has the additional endorsement of 19 Republicans and 14 Democrats.

"I have long supported efforts to eliminate Internet access taxes and other discriminatory taxes on electronic commerce," Rep. Goodlatte said in a statement. "Such taxation would create onerous and unfair burdens on industry, hinder technological development and slow economic growth."

The bill is the House companion to legislation introduced in the U.S. Senate on Jan. 4 by Ron Wyden (D-OR), John McCain (R-AZ) and John Sununu (R-NH).

Rep. Eshoo's bill gained the immediate endorsement of the Washington-based U.S. Telecom Association and has been referred to the House Committee on the Judiciary.

"If Congress were to let this important moratorium expire, the likely resulting increase in state and local taxes on Internet access, would limit consumer choice, force some customers to pay more for high-speed service and could discourage broadband adoption," Walter McCormick, president/CEO of the U.S. Telecom Association, said in a statement.

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