The US House of Representatives has voted to extend by four years the current ban on taxing Internet access, set to expire on November 1.
By an overwhelming vote of 405-2, the House passed legislation that prohibits state and local governments from taxing Internet access services until November 2011.
The bill also allows nine states that began taxing Internet access before 1998 to continue doing so.
Anna Eshoo (D-Calif.), whose electorate includes a part of Silicon Valley, voted against the legislation because she strongly favors a permanent ban.
“The moratorium has served us well and the Internet is now an integral part of everyday life,” Eshoo said earlier this year. “It’s more critical now than at any time since the moratorium was established to protect the Internet from new taxes and fees. The country that invented the Internet no longer leads the world in Internet access and use.”
Although the US has the highest number of Internet users world-wide (211 million) and the highest rate of basic Internet penetration (with 69.7% of the population connected), it lags behind several other countries in terms of broadband, which significantly increases the capacity for transmitting digital information.
Again, the US has the highest number of broadband users in the world at 64.5 million, yet with only 21.4% of the population connected to broadband, the US ranks seventh globally in terms of penetration – trailing the Netherlands (32.8%), South Korea (25.4%), Sweden (27.2%), Canada (23.7%), the United Kingdom (23.1%) and France (22.3%).
US legislators who favor a permanent tax exemption for internet use argue that it is needed to encourage further investment by broadband providers.
Some House Republicans criticized Democrats for blocking legislation that would have granted a permanent tax ban, which Rep. Bob Goodlatte (R-Va.) said would have passed by an “overwhelming margin”.
The Bush administration has also pushed for the moratorium to be made permanent.
Democrats responded that, with the current moratorium due to expire in two weeks, there was no point passing legislation that didn’t have enough support to sail through the Senate unimpeded.
A similar bill to that passed in the House is now stalled in the US Senate due to a dispute over whether the Internet tax ban should be made permanent.
Internet service providers say the price of Internet access could rise by as much as 17 percent if state and local governments were allowed to tax the services.
