[Congressional Record Volume 150, Number 138 (Tuesday, December 7, 2004)]
[Extensions of Remarks]
[Pages E2200-E2201]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     INTERNET TAX NONDISCRIMINATION

                                 ______
                                 

                               speech of

                           HON. CHRIS CANNON

                                of utah

                    in the house of representatives

                       Friday, November 19, 2004

  Mr. CANNON. Mr. Speaker, first, I would like to commend the House and 
Senate for passing the 3 year extension on the moratorium for Internet 
taxes and the President for signing the bill last Friday. I am pleased 
that we were able to extend the moratorium, I agree with the gentleman 
from Wisconsin, the Chairman of the Judiciary Committee, that the 
moratorium should be made permanent. I look forward to working with him 
and others next year to achieve this very important goal.
  Second, for clarification purposes on the grandfather of states that 
tax Internet access, I wish to offer an explanation distinguishing the 
difference between the pre-October 1998 and pre-November 2003 dates as 
found in Section 1104.
  While both sections use the term ``Internet access,'' Section 
1104(a), the provision for pre-October 1998 taxes, applies only to the 
states that were lawfully taxing Internet access before the original 
enactment of the Internet Tax Freedom Act in 1998. The definition of 
``Internet access'' that applies to the Section 1104(a) grandfather 
clause is the definition as set forth in the 1998 Internet Tax Freedom 
Act, as the amended definition does not take effect until November 1, 
2003. Those states that were grandfathered under the Internet Tax 
Freedom Act from 1998 to 2003 will continue to be grandfathered under 
Section 1104(a).
  Section 1104(b), the provision for pre-November 2003 taxes, applies 
only to those states that were taxing telecommunication services 
purchased, used, or sold by an Internet access provider to provide 
Internet access,

[[Page E2201]]

such as Digital Subscriber Line (DSL) access technology, if they were 
doing it lawfully prior to November 1, 2003. The amended definition of 
``Internet access'' in the Internet Tax Freedom Act is effective 
November 1, 2003 and applies to section 1104(b). Section 1104(b) 
expires November 1, 2005 in order to eliminate any ``tax on Internet 
access'' (as defined in Section 1104(10)) regarding telecommunications 
services purchased, used or sold by an Internet access provider for the 
purpose of providing Internet access.
  Finally, in making the Internet Tax Freedom Act technology neutral, 
this law now protects consumers from taxes on all Internet access 
technologies, including dial-up, DSL, cable modem, satellite and 
wireless. A consumer may even purchase Internet access from two 
Internet access providers without the threat of taxes. He may use one 
service to browse the Internet and the other service primarily for e-
mail and content services. Both Internet access services are protected 
from state and local taxation under this law. This law is a significant 
accomplishment on behalf of all American consumers and maximizes 
consumer choice and access.

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