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US ban on internet access tax gets seven year extension

But the option's still open

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A ban on taxing internet access and email will almost certainly become law in the US. Both houses of Congress have approved an extension to the existing law, and President George Bush is expected to sign the bill within days.

A ban on taxing internet and email provision was first passed in the US in 1998 and has been extended twice for three year periods. The Senate had debated the creation of a permanent ban and the dismissing of the law altogether.

Those who backed the tax moratorium said internet access was a social and economic force for good and should escape state taxes.

"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," said Peter Davidson, a Verizon senior vice president, according to news agency Reuters.

States have argued that the option to tax access should be left open for the future, when broadband access is ubiquitous and when taxes could be a vital source of state income.

The Senate chose a compromise extension of seven years, the longest extension yet, but short of a permanent ban. The House of Representatives this week passed the senate’s text without amendments and unanimously.

The US President is expected to sign the bill into law. The previous extension expires on 1 November.

Copyright © 2007, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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