House panel votes to extend Net tax ban

A U.S. House of Representatives committee has voted to extend an Internet tax moratorium for four years, but declined to make the tax ban permanent, as some lawmakers had advocated.

The House Judiciary Committee on Wednesday voted unanimously to approve an amendment to the Internet Tax Freedom Act. The amendment, offered by committee Chairman John Conyers Jr., a Michigan Democrat, would extend the ban on Internet access taxes until Nov. 1, 2011.

Similar legislation has stalled in the Senate.

The current ban on access and other taxes unique to the Internet expires this November. Congress first passed the Internet tax moratorium in 1998.

A group of lawmakers, many of them Republicans, have called for a permanent ban on Internet taxes. The ban is needed to preserve the growth of the Internet, they argue.

But other lawmakers have expressed concerns about a permanent ban, saying it would hurt the ability of state and local governments to raise funds. A permanent ban would give lawmakers little recourse against telecommunications companies that try to sneak other services, such as VoIP, into the tax ban, critics have argued.

Rep. Bob Goodlatte, a Virginia Republican, noted last week that a majority of House members have co-sponsored a bill to permanently ban Internet taxes. "The will of the House is clear -- a strong, bipartisan majority of members want a permanent ban on these burdensome taxes," he said in a statement. "I call on House leadership to bring to the floor a permanent ban, so that the Internet will continue to thrive and so that access to the Internet does not become limited to wealthy Americans in urban areas."

But Conyers on Wednesday said his temporary extension is supported by a wide range of groups, including the Don't Tax Our Web coalition and the National Governors Association. "This bipartisan legislation proves that when working together, we can come to a good result on a complex issue," he said. "Overall, this is a good, strong, and necessary bill that will provide much needed clarity to the communications and Internet industries, while addressing the needs of states and local governments."

The Conyers amendment would allow nine states with Internet access taxes to continue them. It would also narrow the definition of Internet access, excluding services such as VoIP from the tax ban.