October 31, 2003
Senate Delays Internet Access Tax Vote
By Roy Mark

U.S. Senate Majority Leader Bill Frist (R.-TN) said Friday a vote on
extending or making permanent the Internet Access Tax Moratorium will not
happen until at least late next week. The current temporary moratorium
expires Saturday, but the ban has lapsed before for short periods without
states taking any action.

Further precluding any state action is the fact the House of Representatives
has already passed a bill to make the current moratorium permanent. The
original moratorium was established by the Internet Tax Freedom Act (ITFA)
enacted for three years in 1998 and renewed by Congress for another two
years in 2001.

The Internet tax moratorium does not apply to sales taxes on Web
transactions.

The Senate had hoped to vote on the issue before the act expired, but budget
bills and a battle over greenhouse emissions backed up the chamber's agenda.

"We wanted to deal with it this week but members felt there should be
adequate time to debate the issue," Frist said.

The Senate Commerce Committee passed a bill similar to the House legislation
earlier this year, but since the House vote, opponents to a permanent ban
say the House and Senate bills make substantive changes to the current law
that could eventually cost states as much as $9 billion annually in taxes.

The opposition prompted several senators to put a "hold" on the legislation.

The changes to current temporary moratorium include eliminating a
grandfather clause that preserves state and local taxes on Internet access
"imposed and actually enforced prior to October 1, 1998," and an expanded
definition of "Internet access" to prevent states from taxing
telecommunications services "used to provide Internet access."

A number of states, led by the National Governors Association (NGA) are
concerned the new definitions would exempt not only certain
telecommunications services, but would also expand the pre-emption beyond
sales taxes to include some income, property and other business taxes.

Last week, Sens. Charles Grassley (R-IA), John Ensign (R-NV), John Sununu
(R-NH), Gordon Smith (R-OR), and George Allen (R-VA) offered what they
called a compromise to fix the broadened definition terms, but the governors
claim it isn't enough.

In an NGA letter to Senate leadership, Oklahoma Gov. Brad Henry and South
Dakota Gov. Mike Rounds, chair and vice chair of the group's economic
development and commerce committee, said, "With little time to negotiate an
appropriate definition of Internet access, we encourage you to support a
simple, temporary extension of current law to allow Congress, industry, and
state and local governments time to fashion a permanent moratorium that is
thoughtful and fair."

The Congressional Budget Office (CBO) was unable to estimate the amount
state and local revenue losses that would result from this change because
telecommunications companies are not required to maintain records
categorizing their sales by type of customer, making it impossible to
distinguish sales of high-speed telephone lines to Internet access providers
from sales of similar services to other business customers.

However, the CBO did state, "Depending on how the language altering the
definition of what telecommunications services are taxable is interpreted,
that language also could result in substantial revenue losses for states and
local governments."

----- Original Message -----
From: <[log in to unmask]>
To: <[log in to unmask]>
Sent: Saturday, November 01, 2003 12:01 PM
Subject: Re: Urgent to all you folks on email-This is no scam, hoax etc.


> This about the tax on email is absoultely no HOAX< SCAM etc. If you had
read
> it you would see that the information came directly off of the New York
Times
> pages. And the one today about the Congress not extending and making
> permanent  (see below)  came from a conservative on line newspaper that I
am sure you
> must not have heard of called The Federalist. You need to subscribe to it
to
> keep informed.: READ BELOW AGAIN. This went on in YOUR Congress and
liberal
> media kept it hidden.
> You owe me an apology. I got the bit from the Wall Street Journal and that
is
> not a scam or hoax paper.
>
> Congress will not get a chance to extend the Internet Tax Freedom Act
before
> it expires today(Oct 31), because Republicans Lamar Alexander and George
> Voinovich are holding the legislation in limbo -- fodder for some other
legislative
> wink-and-nod shenanigans. The Act is a moratorium on Internet access
> taxation, and double taxation of Web purchases.
>
> To subscribe, change options, or unsubscribe please see the instructions
at
> http://listlva.lib.va.us/archives/va-roots.html
>
>

To subscribe, change options, or unsubscribe please see the instructions at
http://listlva.lib.va.us/archives/va-roots.html