From Senator Gordon Smith Office Press Release 9-24-07:
On September 20, 2007, Senators Gordon H. Smith and Wayne Allard, both of the Republican High Tech Task Force, called for immediate action to permanently ban taxes on internet access. Senator Smith and fellow members of the Task Force championed the ban, which is set to expire in just over a month. The ban is essential to the continued growth and success of the Internet.
“People use the Internet to access information and purchase goods and services,” said 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.”
Since the moratorium was first adopted in 1998, tremendous investment, growth and innovation in the scope and use of the Internet have occurred. By preventing unnecessary taxation of the Internet, Congress promoted the continued expansion of technology and e-commerce. If the moratorium is allowed to lapse, the web would be left unprotected from state and local taxes which will have a stagnating effect on the American economy. The telecommunications industry is already one of the most highly taxed industries, often times with taxation rates higher than so-called “sin” products.
“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,” Smith said. “We must extend this moratorium and keep the Internet free of taxes.”
The Senate Commerce Committee, of which Sen. Smith is a member, will consider the Permanent Internet Tax Moratorium Act (S. 156) this fall.