[Congressional Record Volume 153, Number 20 (Thursday, February 1, 2007)]
[Extensions of Remarks]
[Page E240]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     INTRODUCTION OF THE PERMANENT INTERNET TAX FREEDOM ACT OF 2007

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                           HON. ANNA G. ESHOO

                             of california

                    in the house of representatives

                      Wednesday, January 31, 2007

  Ms. ESHOO. Madam Speaker, I am proud to introduce the Permanent 
Internet Tax Freedom Act of 2007. This legislation completes the work 
begun by Congress in 1998, by permanently banning discriminatory or 
duplicative state or local taxes on Internet access and e-commerce.
  When Congress first instituted a temporary moratorium in 1998, the 
goal was to promote the growth of online commerce and encourage 
universal access. This policy has been a resounding success, fostering 
growth in productivity and innovation and widening public access to 
information. A 2006 report by the Pew Internet and American Life 
Project demonstrated that 73 percent of those polled were Internet 
users, up from 66 percent in a similar 2005 survey. While Americans use 
the Internet for a myriad of reasons, e-commerce has particularly 
flourished and continues to grow at an exceptional rate. In 2006 alone, 
online retail exceeded $100 billion, increasing 24 percent over 2005.
  Despite the successes we have seen, there is still much work to be 
done. Internet usage still lags behind in rural and lower income areas 
and the United States has fallen from 4th to 16th in broadband 
penetration worldwide since 2001. In order to reverse this trend, we 
need to ensure that access costs are kept to a minimum. Prohibiting 
unnecessary access taxes will help accomplish this goal.
  We also need to allow unfettered access to the products and new 
services that are only available through the Internet and prevent 
multiple layers of state and local taxes. Otherwise, we will open the 
door to a myriad of barriers to Internet commerce that will drive 
consumers from a web-based marketplace and stifle innovation.
  Congress twice passed extensions to the moratorium in 2001 and again 
in 2004. Unfortunately, in November of this year the most recent 
extension will expire. Should Congress fail to renew this moratorium 
the continued growth and progress in Internet access and e-commerce 
will be endangered.
  I urge my colleagues to join me in supporting my efforts to make this 
moratorium permanent and finally assure consumers that their Internet 
access and e-commerce will remain unhindered by discriminatory and 
duplicative taxes.

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