House Passes Web-Tax Bill

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Washington -- The House of Representatives last week
approved a bill that proponents said would save the Internet from being entangled in a
morass of conflicting tax regulations.

The "Internet Tax Freedom Act," sponsored by Rep.
Christopher Cox (R-Calif.), would impose a three-year moratorium, blocking all state and
local governments from instituting taxes on Internet-access charges.

The House passed the legislation last Tuesday, by voice
vote.

"Protecting Internet users from discriminatory and
multiple taxation on a national and international basis will insure the continued vitality
and growth of this dynamic new medium," Cox said. Sen. Ron Wyden (D-Ore.) sponsored
comparable legislation in the Senate.

Along with prohibiting new taxes on the Internet, the bill
would create a commission to study the taxation of Internet commerce and to make
recommendations to Congress about how the federal government should proceed.

Originally opposed to the legislation, the National
Governors' Association negotiated with Cox to get more state and local
representatives on the commission.

But the panel could become a sticking point as the bill
goes to the Senate. A few senators have criticized the makeup of the commission, saying
that it is skewed in favor of state and local interests that want to develop a national
plan to tax Internet commerce.

"We don't necessarily concede the point that
Internet commerce should be treated differently than any remote commerce that
occurs," said Ed Amorosi, spokesman for Sen. Judd Gregg (R-N.H.), who has sponsored a
rival bill in the Senate.

Amorosi said he expects Senate Majority Leader Trent Lott
(R-Miss.) to hold Internet-tax legislation until there is consensus on the commission
issue.

States News Service

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