[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[S. 150 Engrossed in Senate (ES)]
108th CONGRESS
2d Session
S. 150
_______________________________________________________________________
AN ACT
To make permanent the moratorium on taxes on Internet access and
multiple and discriminatory taxes on electronic commerce imposed by the
Internet Tax Freedom Act.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Internet Tax Nondiscrimination
Act''.
SEC. 2. FOUR-YEAR EXTENSION OF INTERNET TAX MORATORIUM.
(a) In General.--Subsection (a) of section 1101 of the Internet Tax
Freedom Act (47 U.S.C. 151 note) is amended to read as follows:
``(a) Moratorium.--No State or political subdivision thereof may
impose any of the following taxes during the period beginning November
1, 2003, and ending November 1, 2007:
``(1) Taxes on Internet access.
``(2) Multiple or discriminatory taxes on electronic
commerce.''.
(b) Conforming Amendments.--(1) Section 1101 of the Internet Tax
Freedom Act (47 U.S.C. 151 note) is amended by striking subsection (d)
and redesignating subsections (e) and (f) as subsections (d) and (e),
respectively.
(2) Section 1104(10) of the Internet Tax Freedom Act (47 U.S.C. 151
note) is amended to read as follows:
``(10) Tax on internet access.--
``(A) In general.--The term `tax on Internet
access' means a tax on Internet access, regardless of
whether such tax is imposed on a provider of Internet
access or a buyer of Internet access and regardless of
the terminology used to describe the tax.
``(B) General exception.--The term `tax on Internet
access' does not include a tax levied upon or measured
by net income, capital stock, net worth, or property
value.''.
(3) Section 1104(2)(B)(i) of the Internet Tax Freedom Act (47
U.S.C. 151 note) is amended by striking ``except with respect to a tax
(on Internet access) that was generally imposed and actually enforced
prior to October 1, 1998,''.
(c) Internet Access Service; Internet Access.--
(1) Internet access service.--Paragraph (3)(D) of section
1101(d) (as redesignated by subsection (b)(1) of this section)
of the Internet Tax Freedom Act (47 U.S.C. 151 note) is amended
by striking the second sentence and inserting ``The term
`Internet access service' does not include telecommunications
services, except to the extent such services are purchased,
used, or sold by a provider of Internet access to provide
Internet access.''.
(2) Internet access.--Section 1104(5) of that Act is
amended by striking the second sentence and inserting ``The
term `Internet access' does not include telecommunications
services, except to the extent such services are purchased,
used, or sold by a provider of Internet access to provide
Internet access.''.
SEC. 3. GRANDFATHERING OF STATES THAT TAX INTERNET ACCESS.
The Internet Tax Freedom Act (47 U.S.C. 151 note) is amended--
(1) by redesignating section 1104 as section 1105; and
(2) by inserting after section 1103 the following:
``SEC. 1104. GRANDFATHERING OF STATES THAT TAX INTERNET ACCESS.
``(a) Pre-October 1998 Taxes.--
``(1) In general.--Section 1101(a) does not apply to a tax
on Internet access that was generally imposed and actually
enforced prior to October 1, 1998, if, before that date, the
tax was authorized by statute and either--
``(A) a provider of Internet access services had a
reasonable opportunity to know, by virtue of a rule or
other public proclamation made by the appropriate
administrative agency of the State or political
subdivision thereof, that such agency has interpreted
and applied such tax to Internet access services; or
``(B) a State or political subdivision thereof
generally collected such tax on charges for Internet
access.
``(2) Termination.--This subsection shall not apply after
November 1, 2007.
``(b) Pre-November 2003 Taxes.--
``(1) In general.--Section 1101(a) does not apply to a tax
on Internet access that was generally imposed and actually
enforced as of November 1, 2003, if, as of that date, the tax
was authorized by statute and--
``(A) a provider of Internet access services had a
reasonable opportunity to know by virtue of a public
rule or other public proclamation made by the
appropriate administrative agency of the State or
political subdivision thereof, that such agency has
interpreted and applied such tax to Internet access
services; and
``(B) a State or political subdivision thereof
generally collected such tax on charges for Internet
access.
``(2) Termination.--This subsection shall not apply after
November 1, 2005.''.
SEC. 4. ACCOUNTING RULE.
The Internet Tax Freedom Act (47 U.S.C. 151 note) is amended by
adding at the end the following:
``SEC. 1106. ACCOUNTING RULE.
``(a) In General.--If charges for Internet access are aggregated
with and not separately stated from charges for telecommunications
services or other charges that are subject to taxation, then the
charges for Internet access may be subject to taxation unless the
Internet access provider can reasonably identify the charges for
Internet access from its books and records kept in the regular course
of business.
``(b) Definitions.--In this section:
``(1) Charges for internet access.--The term `charges for
Internet access' means all charges for Internet access as
defined in section 1105(5).
``(2) Charges for telecommunications services.--The term
`charges for telecommunications services' means all charges for
telecommunications services, except to the extent such services
are purchased, used, or sold by a provider of Internet access
to provide Internet access.''.
SEC. 5. EFFECT ON OTHER LAWS.
The Internet Tax Freedom Act (47 U.S.C. 151 note), as amended by
section 4, is amended by adding at the end the following:
``SEC. 1107. EFFECT ON OTHER LAWS.
``(a) Universal Service.--Nothing in this Act shall prevent the
imposition or collection of any fees or charges used to preserve and
advance Federal universal service or similar State programs--
``(1) authorized by section 254 of the Communications Act
of 1934 (47 U.S.C. 254); or
``(2) in effect on February 8, 1996.
``(b) 911 and E-911 Services.--Nothing in this Act shall prevent
the imposition or collection, on a service used for access to 911 or E-
911 services, of any fee or charge specifically designated or presented
as dedicated by a State or political subdivision thereof for the
support of 911 or E-911 services if no portion of the revenue derived
from such fee or charge is obligated or expended for any purpose other
than support of 911 or E-911 services.
``(c) Non-tax Regulatory Proceedings.--Nothing in this Act shall be
construed to affect any Federal or State regulatory proceeding that is
not related to taxation.''.
SEC. 6. EXCEPTION FOR VOICE AND OTHER SERVICES OVER THE INTERNET.
The Internet Tax Freedom Act (47 U.S.C. 151 note), as amended by
section 5, is amended by adding at the end the following:
``SEC. 1108. EXCEPTION FOR VOICE SERVICES OVER THE INTERNET.
``Nothing in this Act shall be construed to affect the imposition
of tax on a charge for voice or similar service utilizing Internet
Protocol or any successor protocol. This section shall not apply to any
services that are incidental to Internet access, such as voice-capable
e-mail or instant messaging.''.
SEC. 7. GAO STUDY OF EFFECTS OF INTERNET TAX MORATORIUM ON STATE AND
LOCAL GOVERNMENTS AND ON BROADBAND DEPLOYMENT.
The Comptroller General shall conduct a study of the impact of the
Internet tax moratorium, including its effects on the revenues of State
and local governments and on the deployment and adoption of broadband
technologies for Internet access throughout the United States,
including the impact of the Internet Tax Freedom Act (47 U.S.C. 151
note) on build-out of broadband technology resources in rural under
served areas of the country. The study shall compare deployment and
adoption rates in States that tax broadband Internet access service
with States that do not tax such service, and take into account other
factors to determine whether the Internet Tax Freedom Act has had an
impact on the deployment or adoption of broadband Internet access
services. The Comptroller General shall report the findings,
conclusions, and any recommendations from the study to the Senate
Committee on Commerce, Science, and Transportation and the House of
Representatives Committee on Energy and Commerce no later than November
1, 2005.
SEC. 8. EFFECTIVE DATE.
The amendments made by this Act take effect on November 1, 2003.
Passed the Senate Apri 29, 2004.
Attest:
Secretary.
108th CONGRESS
2d Session
S. 150
_______________________________________________________________________
AN ACT
To make permanent the moratorium on taxes on Internet access and
multiple and discriminatory taxes on electronic commerce imposed by the
Internet Tax Freedom Act.