The US Senate last night passed a bill that would extend the 1998 Internet Tax Freedom Act, which prohibits local governments from taxing Internet connections, for seven years. About two weeks ago the House of Representatives passed a similar measure that would extend the act for four years. Barring an unlikely presidential veto, this will be the third time the bill has been extended since it was passed into law.
The extension of the tax moratorium has broad support, reports Ars Technica. Most ISPs and the National Governors Association would like to see the tax ban extended at least 4 years. It is commonly thought that the law will eventually be made permanent (perhaps the next time it comes up for extension?). According to Reuters, ISPs claim service costs might jump by as much as 17% if the tax ban were to expire.
Alaskan Senator Ted Stevens was especially happy about the extension of the Internet tube tax moratorium. "By keeping Internet access tax-free and affordable, Congress can encourage Internet use for distance learning, telemedicine, commerce and other important services," he said in a statement.
The bill will now go to a joint committee where the Senate and House will hash out the differences between the two versions of the legislation that were passed. A revised bill is expected to be signed into law by President Bush once it has passed both houses of congress.