[Congressional Record Volume 149, Number 5 (Monday, January 13, 2003)]
[Senate]
[Page S236]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ALLEN:
  S. 150. A bill 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; to the Committee on Commerce, 
Science, and Transportation.
  Mr. ALLEN. Mr. President, today I rise to introduce the Internet Tax 
Nondiscrimination Act of 2003, to permanently extend the moratorium on 
Internet access taxes, as well as prevent multiple and discriminatory 
taxes on the Internet. There are two postulates in life that guide me 
today: first, always stand strong for freedom and opportunity for all 
people; and second, always keep your word and keep your promises.
  As many in this chamber know, I have made permanently extending the 
moratorium on new taxes that discriminate against the Internet one of 
my top priorities since coming to the Senate. Looking back two years 
ago, as a rookie, I was pleased to work in the successful effort, with 
Senator McCain and others, to extend the moratorium on new Internet 
taxes for two years. Of course, I would have preferred to have a 
permanent moratorium and introduced S. 777 to do so back in 2001.
  I cannot ever envision a time when it will be desirable policy for 
any government to tax access to the Internet. I cannot ever conceive of 
any instance or event that will precipitate justification for multiple 
or discriminatory taxes on the Internet by any government, large or 
small, national, State or local.
  This has been a position I have held from 1997 during my days as 
Governor or Virginia when I was one of only four Governors with this 
position. I have promised the first bill I'd introduce in the 108th 
Congress would be a permanent ban on discriminatory taxes and Internet 
access taxes. I am one who stands on the side of freedom of the 
Internet, trusting free people and entrepreneurs, not on the side of 
making this advancement in technology easier to tax for the tax 
collectors. My legislation will permanently ban taxes on Internet 
access, as well as taxes on Internet transactions by multiple 
jurisdictions, and discriminatory taxes that unfairly target Internet 
transactions.
  The current moratorium on Internet tax is set to expire in November 
of this year. I want the members of this body to understand that the 
moratorium on Internet tax is completely unrelated to issues 
surrounding sales tax simplification. I was here for the previous 
debate when legislation extending this moratorium was bogged down and 
held hostage on the extremely complicated and cumbersome issue of sales 
tax collection.
  Since that time, I know State tax administrators have been working to 
simplify their sales tax system. However, I encourage my colleagues in 
the Senate that when considering the issue of sales tax simplification 
and business activity tax nexus that they do so separately from 
legislation that deals with the Internet tax moratorium.
  I understand most of the States are looking for more tax revenue, but 
the Internet Tax Nondiscrimination Act will not, and does not, prohibit 
States from collecting sales and use tax on electronic commerce. 
Rather, this legislation will permanently ban taxes placed on consumers 
to access the Internet, like the Spanish American War Tax on telephone 
service, and prohibits multiple and discriminatory taxes on Internet 
purchases, which are taxes that would apply more than once on the same 
product or taxes that are higher because of the method by which a 
product is purchased.
  The moratorium on Internet access taxes prohibits governments from 
placing taxes on top of the monthly rates Americans already pay to 
connect to the Internet. I am concerned that if this Congress were to 
allow new, discriminatory taxes on Internet access it would be allowing 
States and localities to contribute to the economic ``digital divide.'' 
For every dollar added to the cost of Internet access, we can expect to 
see lost utilization of the Internet by thousands of lower income 
American families nationwide.
  Now, more than ever, with our Nation's economy emerging from a 
recession and the Congress working with the President on an economic 
stimulus package, the people of this country need security with regard 
to their financial future. Any additional tax burdens on the Internet, 
will mean additional costs that many Americans cannot afford, forcing 
the poorest in our society to reduce or even forgo their use of the 
Internet as a tool for education, exploration and individual 
opportunity.
  The more expensive the government makes Internet access, the less 
likely people will be to buy advanced services, such as high-speed 
broadband connections, Internet protocol software, wireless WiFi 
devices and many other multimedia applications. In a time when 
technology and the Internet have grown into every aspect of our daily 
lives and where access to the Internet has become a necessity for 
Americans, will imposing taxes to access the Internet or levying taxes 
that discriminate against the Internet as a form of commerce ever be 
fair? The answer is that there will never be a time to tax access to 
the Internet nor impose discriminatory taxes on Internet commerce.
  The goal of the Internet Tax Nondiscrimination Act is simple and 
clear: the Internet should remain as accessible as possible to all 
people in all parts of our country, forever.
  I call on my colleagues to join me and cosponsor the Internet Tax 
Nondiscrimination Act of 2003, permanently extending the Internet 
moratorium on access, multiple and discriminatory taxes.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 150

       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 Non-
     discrimination Act of 2003''.

     SEC. 2. AMENDMENT OF INTERNET TAX FREEDOM ACT.

       Section 1101(a) of the Internet Tax Freedom Act (47 U.S.C. 
     151 nt.) is amended--
       (1) by striking ``taxes during the period beginning on 
     October 1, 1998, and ending on November 1, 2003--'' and 
     inserting ``taxes:'';
       (2) by striking paragraph (1) and inserting the following:
       ``(1) Taxes on Internet access.''; and
       (3) by striking ``multiple'' in paragraph (2) and inserting 
     ``Multiple''.

     SEC. 3. REPEAL OF EXCEPTION.

       Section 1104 of the Internet Tax Freedom Act (47 U.S.C. 151 
     nt.) is amended by striking paragraph (10).
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