November 18, 2004

Action on a Web Tax Ban

WASHINGTON, Nov. 17 (Reuters) - Congress moved Wednesday toward reinstating a ban on Internet access taxes, as the Senate modified a measure it had previously passed with hopes that the House of Representatives would take it up.

The House could vote on the measure on Thursday or Friday, a staff member said.

"This compromise balances well two important principles: federalism and free markets," said Senator Lamar Alexander, a Republican of Tennessee.

The ban expired one year ago amid predictions that state taxes could choke Internet growth.

Since 1998, Congress has prevented states and local governments from taxing the monthly access fees that Internet providers charge their customers, though it did allow existing taxes to stay in place.

The House voted last year to make the moratorium permanent, phase out existing state taxes and expand the ban to include high-speed broadband service.