Moratorium on state Internet access taxes

The Senate has approved legislation extending for seven years a moratorium on state Internet access taxes. With only days left before the Internet tax ban was set to expire, the Senate reached a compromise between lawmakers who proposed a shorter extension and those who insisted it should be made permanent. The vote came about two weeks after the House of Representatives approved a four-year extension of the Internet tax ban. The two chambers must work out their differences on the bill before a final version can be approved and signed by President Bush.

The state tax ban has been in place since 1998. It was last renewed by Congress in 2004 for three years. It is scheduled to expire on Nov. 1. Internet service providers say the price of Internet access could rise by as much as 17% if the moratorium on state taxes were allowed to expire. Some senators, including many Republicans, said that a permanent Internet tax ban was needed to spur more investment by broadband providers and complained that Democratic leaders blocked a vote on a permanent moratorium.