House Judiciary Approves Permanent Ban on Internet Access Tax

WASHINGTON, D.C.—Net neutrality may be up in the air, but some members of Congress appear determined to deal once and for all with the question of taxing internet access, which they want to permanently ban. According to broadcastingcable.com's John Eggerton, "The House Judiciary Committee has approved a bill that would make permanent the moratorium on Internet access taxes and multiple discriminatory online taxes. The vote was 30 to 4 on the Permanent Internet Tax Freedom Act (HR 3086), and followed the defeat of an amendment proposed by ranking member John Conyers (D-Mich.), that would have simply extended the moratorium another four years, and removed a provision eliminating the grandfathered taxes of seven states who had those access taxes in place before the 1998 passage of the initial moratorium." Not everyone was in favor of a permanent ban, however. "Several Democrats argued that a permanent ban was favoring the broadband sector, was a violation of states' rights, and did not allow Congress the flexibility to review the ban periodically to see if it was still necessarily, given that it was passed when the Internet was a fledgling," reported Eggerton. "They also pointed out that removing the grandfather clause could mean hundreds of millions of lost revenues in those seven states—including over $300 million in Texas alone—which would mean states would turn elsewhere for the money, impacting other sectors." That view was decidedly in the minority, however, with backers of the bill countering "that the grandfather clause had been a way to give those states time to transition to other sources of revenue, and they had had 16 years to do so." The Internet Tax Freedom Act, which has been extended three times since 1998, is currently scheduled to expire Nov. 1 of this year unless that action is made moot by the bill just approved by the House, which was introduced by a bipartisan group of legislators in September of last year. Needless to say, a permanent ban on internet taxes is supported by cable companies and other internet service providers. The CTIA issued a statement after the vote, saying, "With today’s action, the House Judiciary Committee has taken an important step toward heading off Internet access taxation. We hope the full House will follow suit as soon as possible.” Michael Powell, president of the National Cable & Telecommunications Association added, "Failing to extend the current Internet tax moratorium by November 1st risks driving up the cost of connectivity. We urge the Congress to quickly pass this important legislation so that American consumers and businesses will continue to be protected from any additional taxes and fees that could raise the price of Internet access and slow the rapid adoption of broadband services." A Senate version of the House bill, S. 1431, which was introduced by Sens. Ron Wyden (D-Ore.) and John Thune (R-S.D.) in August of last year, has not seen any action since that time.