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WASHINGTON (AP) — The Senate on Thursday night approved a seven-year extension of a moratorium on state and local taxes on Internet access.
The Senate voice vote came a little over a week after the House passed a bill calling for a four-year moratorium. The tax ban, first approved in 1998, is set to expire Nov. 1.
Attempts in both the House and Senate to make the ban permanent in recent weeks were unsuccessful despite strong support for the idea.
Sens. Tom Carper, D-Del., and Lamar Alexander, R-Tenn., in a joint statement called the agreement "a commonsense victory both for Internet users and for state and local governments."
The two chambers will have to reach a compromise on the length of the ban and other differences before the bill can be sent to the White House for President Bush's signature.
Interestingly, the first phone tax wasn't added until the Spanish American War. A tax was added to help pay for this war. It was just removed a few years ago and a tax credit was given to people last year who had paid it since the court had ruled the tax illegal...over a hundred years after the war was over!
I wonder what pre-text Congress will use to tax the Internet when they finally do?
I'm confused... is this about taxes on internet shopping or just about taxes on internet access?
Both. Here's the wikipedia entry for the original Internet Tax Freedom Act [en.wikipedia.org] tax ban that is being extended:
This law bars federal, state and local governments from taxing Internet access and from imposing discriminatory Internet-only taxes such as bit taxes, bandwidth taxes, and email taxes. The law also bars multiple taxes on electronic commerce.
Contrary to popular belief, it does not exempt sales made on the internet as they will be taxed at the same rate as non-Internet sales just like mail order sales. The Act did not repeal any state sales or use tax.
[edited by: martinibuster at 8:47 pm (utc) on Oct. 26, 2007]
i' ve neaver under stood taxing phone and internet services you pay VAT/Sales tax so what is the rationalisation for this extra tax.
Huge bloated government that spends way beyond its means and provides services far beyond its original charter doesn't need "rationale" it just needs whiny voters who think that it is the job of government to provide everything and will continue to vote for the idiot politician that promises to give them the most. That combination of elements produces the recipe to tax everything possible without any type of "rationale"