[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3678 Engrossed Amendment Senate (EAS)]
In the Senate of the United States,
October 25, 2007.
Resolved, That the bill from the House of Representatives (H.R.
3678) entitled ``An Act to amend the Internet Tax Freedom Act to extend
the moratorium on certain taxes relating to the Internet and to
electronic commerce.'', do pass with the following
AMENDMENT:
Strike out all after the enacting clause and insert:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Internet Tax Freedom Act Amendments
Act of 2007''.
SEC. 2. MORATORIUM.
The Internet Tax Freedom Act (47 U.S.C. 151 note) is amended--
(1) in section 1101(a) by striking ``2007'' and inserting
``2014'', and
(2) in section 1104(a)(2)(A) by striking ``2007'' and
inserting ``2014''.
SEC. 3. GRANDFATHERING OF STATES THAT TAX INTERNET ACCESS.
Section 1104 of the Internet Tax Freedom Act (47 U.S.C. 151 note)
is amended by adding at the end the following:
``(c) Application of Definition.--
``(1) In general.--Effective as of November 1, 2003--
``(A) for purposes of subsection (a), the term
`Internet access' shall have the meaning given such
term by section 1104(5) of this Act, as enacted on
October 21, 1998; and
``(B) for purposes of subsection (b), the term
`Internet access' shall have the meaning given such
term by section 1104(5) of this Act as enacted on
October 21, 1998, and amended by section 2(c) of the
Internet Tax Nondiscrimination Act (Public Law 108-
435).
``(2) Exceptions.--Paragraph (1) shall not apply until June
30, 2008, to a tax on Internet access that is--
``(A) generally imposed and actually enforced on
telecommunications service purchased, used, or sold by
a provider of Internet access, but only if the
appropriate administrative agency of a State or
political subdivision thereof issued a public ruling
prior to July 1, 2007, that applied such tax to such
service in a manner that is inconsistent with paragraph
(1); or
``(B) the subject of litigation instituted in a
judicial court of competent jurisdiction prior to July
1, 2007, in which a State or political subdivision is
seeking to enforce, in a manner that is inconsistent
with paragraph (1), such tax on telecommunications
service purchased, used, or sold by a provider of
Internet access.
``(3) No inference.--No inference of legislative
construction shall be drawn from this subsection or the
amendments to section 1105(5) made by the Internet Tax Freedom
Act Amendments Act of 2007 for any period prior to June 30,
2008, with respect to any tax subject to the exceptions
described in subparagraphs (A) and (B) of paragraph (2).''.
SEC. 4. DEFINITIONS.
Section 1105 of the Internet Tax Freedom Act (47 U.S.C. 151 note)
is amended--
(1) in paragraph (1) by striking ``services'',
(2) by amending paragraph (5) to read as follows:
``(5) Internet access.--The term `Internet access'--
``(A) means a service that enables users to connect
to the Internet to access content, information, or
other services offered over the Internet;
``(B) includes the purchase, use or sale of
telecommunications by a provider of a service described
in subparagraph (A) to the extent such
telecommunications are purchased, used or sold--
``(i) to provide such service; or
``(ii) to otherwise enable users to access
content, information or other services offered
over the Internet;
``(C) includes services that are incidental to the
provision of the service described in subparagraph (A)
when furnished to users as part of such service, such
as a home page, electronic mail and instant messaging
(including voice- and video-capable electronic mail and
instant messaging), video clips, and personal
electronic storage capacity;
``(D) does not include voice, audio or video
programming, or other products and services (except
services described in subparagraph (A), (B), (C), or
(E)) that utilize Internet protocol or any successor
protocol and for which there is a charge, regardless of
whether such charge is separately stated or aggregated
with the charge for services described in subparagraph
(A), (B), (C), or (E); and
``(E) includes a homepage, electronic mail and
instant messaging (including voice- and video-capable
electronic mail and instant messaging), video clips,
and personal electronic storage capacity, that are
provided independently or not packaged with Internet
access.'';
(3) by amending paragraph (9) to read as follows:
``(9) Telecommunications.--The term `telecommunications'
means `telecommunications' as such term is defined in section
3(43) of the Communications Act of 1934 (47 U.S.C. 153(43)) and
`telecommunications service' as such term is defined in section
3(46) of such Act (47 U.S.C. 153(46)), and includes
communications services (as defined in section 4251 of the
Internal Revenue Code of 1986 (26 U.S.C. 4251)).'', and
(4) in paragraph (10) by adding at the end the following:
``(C) Specific exception.--
``(i) Specified taxes.--Effective November
1, 2007, the term `tax on Internet access' also
does not include a State tax expressly levied
on commercial activity, modified gross
receipts, taxable margin, or gross income of
the business, by a State law specifically using
one of the foregoing terms, that--
``(I) was enacted after June 20,
2005, and before November 1, 2007 (or,
in the case of a State business and
occupation tax, was enacted after
January 1, 1932, and before January 1,
1936);
``(II) replaced, in whole or in
part, a modified value-added tax or a
tax levied upon or measured by net
income, capital stock, or net worth
(or, is a State business and occupation
tax that was enacted after January 1,
1932 and before January 1, 1936);
``(III) is imposed on a broad range
of business activity; and
``(IV) is not discriminatory in its
application to providers of
communication services, Internet
access, or telecommunications.
``(ii) Modifications.--Nothing in this
subparagraph shall be construed as a limitation
on a State's ability to make modifications to a
tax covered by clause (i) of this subparagraph
after November 1, 2007, as long as the
modifications do not substantially narrow the
range of business activities on which the tax
is imposed or otherwise disqualify the tax
under clause (i).
``(iii) No inference.--No inference of
legislative construction shall be drawn from
this subparagraph regarding the application of
subparagraph (A) or (B) to any tax described in
clause (i) for periods prior to November 1,
2007.''.
SEC. 5. CONFORMING AMENDMENTS.
(a) Accounting Rule.--Section 1106 of the Internet Tax Freedom Act
(47 U.S.C. 151 note) is amended--
(1) by striking ``telecommunications services'' each place
it appears and inserting ``telecommunications'', and
(2) in subsection (b)(2)--
(A) in the heading by striking ``services'',
(B) by striking ``such services'' and inserting
``such telecommunications'', and
(C) by inserting before the period at the end the
following: ``or to otherwise enable users to access
content, information or other services offered over the
Internet''.
(b) Voice Services.--The Internet Tax Freedom Act (47 U.S.C. 151
note) is amended by striking section 1108.
SEC. 6. SUNSET OF GRANDFATHER PROVISIONS.
Section 1104(a) of the Internet Tax Freedom Act is amended by
adding at the end thereof the following:
``(3) Exception.--Paragraphs (1) and (2) shall not apply to
any State that has, more than 24 months prior to the date of
enactment of this paragraph, enacted legislation to repeal the
State's taxes on Internet access or issued a rule or other
proclamation made by the appropriate agency of the State that
such State agency has decided to no longer apply such tax to
Internet access.''.
SEC. 7. EFFECTIVE DATE.
This Act, and the amendments made by this Act, shall take effect on
November 1, 2007, and shall apply with respect to taxes in effect as of
such date or thereafter enacted, except as provided in section 1104 of
the Internet Tax Freedom Act (47 U.S.C. 151 note).
Attest:
Secretary.
110th CONGRESS
1st Session
H. R. 3678
_______________________________________________________________________
AMENDMENT