House committee extends tax ban

The House Judiciary Committee passed a bill Thursday that will extend the

current ban on Internet taxes to October 21, 2006. The bill will be considered

by the full House next week.

The Internet Non-Discrimination Act passed 29-6. The current ban of

special and discriminatory taxes ends on October 21, 2001.

The bill also will eliminate a "grandfather clause" that currently permits

several jurisdictions that had begun to tax the Internet to continue doing

so.

The issue of Internet taxes has been widely debated for some time. The

Advisory Commission on Electronic Commerce report, presented to Congress

last month, advised Congress to extend the moratorium five years. However,

some dispute that report because the commission did not get the support

of two-thirds of the commission, or a "super-majority," only a simple majority.

Most state and local officials and organizations favor Internet taxes,

and 42 governors signed a letter to Congress last month stating that. They

argue that by not taxing the Internet, traditional retail stores are hurt

and the government loses tax dollars.