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US extends net access tax ban

Three more years

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The US Congress has passed a three year ban on internet taxes. State and local governments cannot put tax on internet connections - whether they are dial-up access or DSL access.

The only exception is in states which introduced taxes before the original ban was put in place in 1998. One exception is Wisconsin, which has two years to remove its internet tax. The law replaces a three-year moratorium on net taxes which was in place until last year. It covers not only internet access but also treats internet purchases differently to "real world" purchases.

Politicians tried last year to pass a permanent ban, but failed; most welcomed the weaker law passed last week.

The law does not cover new technologies like Voice over Internet Protocol. But local states won't be able to tax VoIP phone calls because the Federal Communications Commission ruled that only central government has the right to impose such taxes. ®

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