The ban on taxing Internet services that has been in effect since 1998 and was set to expire Thursday will live on.
Congress approved a seven-year extension of the tax moratorium Tuesday, sending the bill to President George W. Bush to sign into law. The final bill, based on a Senate version passed last week, added three more years to the House of Representatives' earlier approval of a four-year extension and closed loopholes that critics argued opened the possibility for taxing email.
Supporters of the ban argued that the taxation of Internet access would have broad negative economic and social effects. Taxing access to the Internet would dampen investment in the Internet from established service providers such as Google Inc. and Verizon Communications Inc., as well as discourage the very startups that have helped turn the Internet into a powerful global marketplace, supporters said. Internet service providers claimed the cost of Internet access could increase as much as 17% if the ban were allowed to expire.
Nick Soggupresident and CEOSilverTech Inc.
"Broadband access is now a crucial driver of America's economy, and this moratorium extension will ensure continued investment and growth in the broadband marketplace. This is good for consumers and businesses across the country," said Peter Davidson, senior vice president of Verizon federal government regulations, in a statement.
Nick Soggu, president and CEO of Web site developer SilverTech Inc., applauded the legislation but said he would be happier with a bill that makes the moratorium permanent. "You don't want to keep consumers off the Web," said Soggu, whose Manchester, N.H., company was formed in 1997 and survived the dot-com bust of the late 1990s.
SilverTech clients run the gamut from technology companies such as EMC Corp. to the nonprofit Boys & Girls Clubs of New Hampshire. "An Internet tax would restrict our business and the way businesses and consumers could interact with our clients. You take a nonprofit client who collects donations over the Web. A 5% or 10% increase in costs would mean they're not getting the return they're after," Soggu said.
The thriving technology company was slated to be the site of a press conference by New Hampshire Senator John Sununu, a champion of the 1998 Internet Tax Freedom Act who favors a permanent Internet tax ban.
Let us know what you think about the story; email: Linda Tucci, Senior News Writer