Please read the latest tax moratorium news, below. And please, if you
want the moratorium to continue, go here to write a letter to Congress:
http://www.goiam.org/communicator/inettax/form.cfm
--------------------
WASHINGTON (Reuters) - A U.S. senator said on Thursday that he would
hold up
a massive year-end spending bill if it included a ban on Internet-access
taxes that he and several colleagues fear would harm state and local
finances.
Delaware Sen. Thomas Carper, a Democrat, told reporters he would try to
keep
the omnibus bill from coming to the Senate floor if the ban was
included in
its present form, which he said infringed on the rights of state and
local
governments to raise revenues.
"If we end up with just an awful ... provision I would certainly object
to
bringing the omnibus spending bill to the floor and I suspect others
will
join me," Carper told reporters after a news briefing on the issue.
Although Senate rules offer many ways for individual senators to hold up
bills they disagree with, it would be hard for Carper to do more than
delay
the bill for a few days.
Colleagues said they hoped to reach a deal with lawmakers on the other
side
of the issue before matters reached a head.
The ban is meant to replace a 1998 moratorium that kept state and local
government from imposing taxes on the monthly fees Internet providers
such
as EarthLink Inc (ELNK). charge their customers. The moratorium expired
on
Nov. 1.
As written, the replacement measure would permanently ban those taxes as
well as taxes on high-speed cable and DSL services not covered under the
original moratorium.
The new version, which cleared the House of Representatives in
September,
would also eliminate access taxes that were in place in some states
before
1998. Senate leaders brought the bill to the floor several weeks ago but
pulled it back after it became apparent the measure might not pass
easily.
BROADLY WORDED BILL
State and local governments fear the legislation is worded so broadly
that
it would restrict them from collecting all manner of other taxes on the
telecommunications industry.
They say it could cost them as much as $9 billion in tax revenues a
year by
2006 as phone calls, music sales and other activities migrate to the
Internet.
The Congressional Budget Office estimates these jurisdictions would lose
$195 million that year but said the true cost of the provision could
not be
determined and could be much higher.
Calling the ban proposal an unfunded mandate on states and a massive tax
break for the telecommunications industry, Republican Sen. Lamar
Alexander
of Tennessee said he and his colleagues had proposed a compromise
two-year
ban.
The compromise would ban access taxes both on DSL and in states
previously
allowed to tax Internet access services.
He said there was also a chance that the two sides could simply agree to
extending the terms of the expired moratorium for a few months while
they
agreed on what should come afterward.
But Virginia Republican Sen. George Allen, whose state boasts a large
high-tech business community and who supports the permanent ban
proposal,
said he could not accept an extension either for a few months or two
years.
"Senator Allen does not believe a two-year extension provides either
consumers or businesses with adequate stability to plan future
significant
buildout of broadband," his spokesman said, adding that Allen's goal
was to
keep industry costs down to make Internet access affordable for all.
A spokeswoman for Oregon Sen. Ron Wyden, a Democrat, said Wyden was
similarly unmoved by proposals presented thus far. Extension of the
terms of
the previous ban simply gave states more time to institute new taxes on
the
Internet, she said.
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