Internet Tax Freedom Act Set To Expire
(Source Document)

Could users be taxed when logging onto the Internet? That's the concern of many watchdog groups as November 1, 2007, approaches.

The Internet Tax Freedom Act, a moratorium on Internet access taxes adopted in 1998, is set to expire the first of next month. In September, several watchdog groups banded together and sent a letter to Congress asking leaders to pass S. 156 and H.R. 743 -- permanently extending the federal moratorium on Internet access taxes. In the letter they stated that "taxing access and Internet activities would not only hinder the expansion of technology that fuels our modern economy, but it would also rebuild communication barriers among families, hamper growing businesses, and negatively impact our lives in countless ways."

In a press release, Senator Gordon H. Smith (R-Oregon), who is Chairman of the Senate Republican High Tech Task Force, calls for immediate action regarding the ban on Internet access taxes. "People use the Internet to access information and purchase goods and services," says Smith. "It is inappropriate to tax someone for walking into a library or a shopping mall. By that rationale, we should not be taxing the Internet."

He notes that since the moratorium was first put in place, the Internet has experienced tremendous investment, growth, and innovation. He also says that allowing the moratorium to lapse will leave the web vulnerable to state and local taxes, which will have a stagnating effect on the U.S. economy.

"Congress has very little time to act before Internet access becomes vulnerable to burdensome taxation. Internet access helps children in school, bolsters local businesses, and encourages innovation," says Smith. "We must extend this moratorium and keep the Internet free of taxes."

Other supporters for the continuation of the moratorium include Senate Majority Leader Harry Reid (D-Nevada). He believes that Congress will approve a "continuation of the moratorium." He points out that it has received bipartisan support in the past, and he expects that support to continue.