CQ TODAY
Oct. 15, 2007 – 7:42 p.m.
Long-Term Internet Tax Ban Trumped

House leaders are using a looming deadline and procedural heavy-handedness to thwart the will of nearly 240 House members who support a permanent ban on Internet-access taxes, some supporters of the ban say.

Democratic leaders have scheduled a vote Tuesday on a bill (HR 3678) that would extend for four years the existing ban on taxing Internet access, which is scheduled to expire Nov. 1.

Although supporters of making the tax ban permanent almost certainly would have enough votes to amend the bill more to their liking, it is scheduled for consideration under suspension of the rules, a procedure that bars amendments and is usually reserved for less controversial legislation.

“Basically, what the Democratic leadership has said is, ‘Here’s four years, take it or leave it,’ ” said Republican Robert W. Goodlatte of Virginia, cosponsor of a bill that would permanently ban Internet-access taxes. “Congress will probably take it, but I don’t know. We’ll have to wait and see what the vote is.”

It takes a two-thirds House vote to pass a bill under suspension of the rules, and with 238 members cosponsoring a bill that would permanently ban Internet-access taxes (HR 743), the fate of the four-year moratorium is uncertain. Democrat Anna G. Eshoo, who represents part of California’s Silicon Valley region, has sponsored the permanent moratorium legislation.

“If we had an opportunity to bring up Eshoo’s bill as a substitute amendment or as a motion to recommit, it would pass overwhelmingly,” Goodlatte said.

The technology industry is pressing Eshoo and House Speaker Nancy Pelosi, D-Calif., for an extension longer than four years. But with the current moratorium on Internet-access taxes set to expire, Internet interests are willing to settle for a shorter extension, House aides said.

Some backers of a permanent ban also think the four-year proposal is better than nothing. Few want to be on record voting against an extension with the moratorium’s expiration so near, said a Republican aide.

“If it’s good enough to continue the Internet tax moratorium for four years then why not just make it permanent?” said a House GOP leadership aide. “Having said that, we aren’t going to advocate taking down tax relief, albeit temporary tax relief, that is critical for our digital economy.”

The four-year moratorium extension, sponsored by Judiciary Chairman John Conyers Jr., D-Mich., would prevent most state and local governments from collecting levies on cable modem, digital subscriber line, Wi-Fi and other types of Internet access. A handful of states that taxed Internet service before access taxes were banned would be allowed to continue collecting the levies under the bill.

Senate Minority Leader Mitch McConnell, R-Ky., and Republican Whip Trent Lott of Mississippi will convene a press conference to coincide with the House vote. They will be joined by Ted Stevens of Alaska, who is the ranking Republican on the Senate panel that has jurisdiction over the issue, and John E. Sununu, R-N.H., sponsor of a permanent Internet-access tax moratorium bill (S 2128) in the Senate.

Senate Majority Leader Harry Reid, D-Nev., is widely expected to pick up the House-passed four-year measure for a speedy Senate vote, said a Senate GOP aide. The Republican leadership is hoping to broker a compromise first, the aide said.

The four-year tax ban would extend the moratorium through fiscal 2011. The ban was first enacted in 1998 and most recently extended in 2004 (PL 105-277).

The Judiciary Committee approved the Conyers bill, 38-0, on Oct. 10. The unanimous vote followed a short-lived victory by Goodlatte, whose amendment to extend the moratorium for eight years was adopted, 20-18. The amendment was later defeated, 17-22, on a revote called by Conyers.

Source: CQ Today
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