Extend the Inter-tax ban

The U.S. Senate is holding up the renewal of the federal ban on Internet access taxes. The Internet Tax Non-Discrimination Act, originally passed by Congress in 1998, has prevented taxation of Internet access as well as discriminatory taxes that single out Internet sales or use.\nIt expired Nov. 1, and the House of Representatives unanimously cleared a permanent ban earlier this year. It is currently being held up in the Senate.\nSenate opponents of the ban, including three former governors, have introduced an amendment to extend the existing ban by two years to study the effects it will have on local and state governments.\nWe believe this extension is currently the best action to take, because the issue is certainly much more complicated than proponents have portrayed it to be.\nThe ban only accounts for Internet access, not Internet sales. It was originally put in place to help get the Internet moving and encourage consumers to get Internet access. Five years later, when most of America is on the Internet, opponents say it's time to take the tax-free training wheels off the Internet.\nConsumers in most states actually don't have to pay sales taxes on the monthly fees they pay Internet service providers.\nOnly 10 states tax Internet access. They have been exempt from the current ban, but if the ban is made permanent, they would lose their ability to tax and would also lose at least $80 million a year starting in 2007, according to the Congressional Budget Office.\nThe bill would also prohibit taxes on DSL service. About two dozen states levy such taxes, which are classified as telecommunications services, not access services. If they are prohibited to tax, they could lose $40 million to $75 million a year by 2008.\nThe money issue then is not about whether Internet access or telecommunications services should be taxed, or how much taxes might be. It's about whether the federal government has a right to tell states what they can and can't do in terms of money when those very same states face looming budget short-falls in the next few years.\nIf those states can't get the money from somewhere, they will tax elsewhere to get the money they need.\nThere is a concern that if Internet access becomes taxable, it will open the door to new taxes on e-mail, Web surfing, chat rooms and all manner of Internet traffic and its effects on interstate commerce. \nThose fears are legitimate, but currently unfounded. In terms of accessible technology, the Internet is still young. No one currently knows how things may be for the future, but a permanent ban is not the right solution. By extending the moratorium and keeping the status quo, it gives Congress time to examine the issue and perhaps create a better solution.