US lawmakers extend Internet tax moratorium

A bill to extend a moratorium on internet access taxes for seven years was approved 402-0 by the US House, less than two days before it was set to expire, an Associated Press report said.

The Associated Press report said the US House initially approved a four-year ban, but last week the Senate passed a seven-year prohibition, despite considerable support for a permanent ban.

'Seven years is better than nothing, and that's what we're doing today,' Rep. Fred Upton, R-Mich, during remarks on the House floor, was quoted as saying.

A House bill that would make the moratorium permanent has 238 House co-sponsors, more than a majority.

The tax ban, first approved in 1998 and twice renewed, is set to expire November 1.

Support for a permanent ban was strong in both the House and Senate, but concerns over the potential long-term impact on state and local governments forced a compromise, the Associated Press report said.

The provision amounts to a moratorium on state and local taxes, according to David Quam, director of federal relations with the National Governors Association. And with the internet changing rapidly, the issue should be revisited periodically, he said.

The report further said In addition to lengthening the ban from four years to seven years, the legislation also contains a provision aimed at preventing state and local governments from assessing taxes beyond those levied on simple internet access.