[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3678 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 3678

   To amend the Internet Tax Freedom Act to extend the moratorium on 
   certain taxes relating to the Internet and to electronic commerce.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           September 27, 2007

   Mr. Conyers (for himself, Ms. Linda T. Sanchez of California, Mr. 
    Cannon, Mr. Boucher, Mr. Watt, Mr. Issa, and Mr. Sensenbrenner) 
 introduced the following bill; which was referred to the Committee on 
                             the Judiciary

_______________________________________________________________________

                                 A BILL


 
   To amend the Internet Tax Freedom Act to extend the moratorium on 
   certain taxes relating to the Internet and to electronic commerce.

    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 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 
        ``2011'', and
            (2) in section 1104(a)(2)(A) by striking ``2007'' and 
        inserting ``2011''.

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 amended by 
                section 2(c) of the Internet Tax Nondiscrimination Act 
                (Public Law 108-435).
            ``(2) Exceptions.--Paragraph (1) shall not apply until 
        November 1, 2007, 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 November 1, 
        2007, with respect to any tax subject to the exceptions 
        described in subparagraphs (A) and (B) of paragraph (2).''.

SEC. 4. DEFINITION.

    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; and
                    ``(D) does not include voice, audio or video 
                programming, or other products and services (except 
                services described in subparagraph (A), (B), or (C)) 
                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), or (C).'',
            (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.--Effective November 1, 
                2007, the term `tax on Internet access' also does not 
                include a State tax that--
                            ``(i) is imposed on at least 80 percent of 
                        business enterprises engaged in business in the 
                        State without regard to--
                                    ``(I) the form of organization;
                                    ``(II) business activity in which 
                                such enterprise is engaged;
                                    ``(III) minimum filing thresholds;
                                    ``(IV) whether such business 
                                actually incurs a filing and payment 
                                obligation; and
                            ``(ii) was enacted between June 30, 2005, 
                        and November 1, 2007, to replace, in whole or 
                        in part, a tax that, pursuant to section 
                        1105(10)(B) or a modified value-added tax, is 
                        not a tax on Internet access.''.

SEC. 5. CONFORMING AMENDMENTS.

    Section 1106 of the Internet Tax Freedom Act (47 U.S.C. 151 note) 
is amended--
            (1) in subsection (b)(2)--
                    (A) in the heading by striking ``services'', and
                    (B) by striking ``such services'' and inserting 
                ``such telecommunications'', and
            (2) by striking ``services'' each place it appears.

SEC. 6. EFFECT ON OTHER LAWS.

    Section 1107 of the Internet Tax Freedom Act (47 U.S.C. 151 note) 
is amended by adding at the end the following:
    ``(d) Certain Taxes on Internet Access.--No State shall prohibit a 
provider of Internet access from--
            ``(1) collecting from customers, directly or indirectly, 
        the amount of any tax described in section 1105(10)(C) that is 
        imposed on Internet access revenues; or
            ``(2) separately stating the amount of such tax on customer 
        bills.''.

SEC. 7. RULE OF CONSTRUCTION.

    Section 1108 of the Internet Tax Freedom Act (47 U.S.C. 151 note) 
is amended by striking section 1108.
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