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Advocates Push for Permanent ISP Tax Ban

UPDATE:House Passes Internet Tax Freedom Act

WASHINGTON — A half-dozen very different advocacy groups are united in their support for making the moratorium on Internet-access taxes permanent in all but a handful of states, and say the Federal Communications Commission's recent decision reclassifying ISPs as common carriers adds even more urgency.

In a letter to House and Senate leadership, the groups — which include Americans for Tax Reform, the U.S. Chamber of Commerce, Rainbow PUSH and Consumer Action — said that they needed to pass a pair of bills, HR 235 and S 431, ASAP.

Those House and Senate measures make the Internet Tax Freedom Act (ITFA) permanent. The ITFA expires unless periodically reauthorized. It has been extended five times since 1998, most recently through September, after the moratorium was extended last December as part of a must-pass appropriations bill.

"For the last 17 years, most consumers have been protected from paying state and local taxes on their Internet access services," the groups wrote. "They have likewise been protected from the high rates of taxation that we currently witness on traditional telecommunication services — services that are often taxed at rates more than double those that are imposed on other goods and services. ITFA has allowed the Internet to become the engine for economic growth, opportunity and inclusion by ensuring consumers and business alike have the ability to fully participate in today's global economy.

"However, in light of the recent FCC decision, there has never been a more important time in the history of the Internet for this national policy to finally be made permanent. Regardless of what our organizations' positions might be on the regulatory action [title II reclassification] itself, we all agree that permanently extending ITFA will help mitigate potential adverse tax ramifications for consumers that could result from this ruling.

Also signing on to the letter were the Information Technology and Innovation Foundation National Taxpayers Union.

The House was planning to take up its version of the bill Tuesday afternoon.

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.