[Congressional Record Volume 153, Number 166 (Tuesday, October 30, 2007)]
[House]
[Pages H12160-H12164]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            INTERNET TAX FREEDOM ACT AMENDMENTS ACT OF 2007

  Ms. LINDA T. SANCHEZ of California. Madam Speaker, I move to suspend 
the rules and concur in the Senate amendment to the bill (H.R. 3678) to 
amend the Internet Tax Freedom Act to extend the moratorium on certain 
taxes related to the Internet and to electronic commerce.
  The Clerk read the title of the bill.
  The text of the Senate amendment is as follows:

       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;

[[Page H12161]]

       ``(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).

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
California (Ms. Linda T. Sanchez) and the gentleman from Texas (Mr. 
Smith) each will control 20 minutes.
  The Chair recognizes the gentlewoman from California.


                             General Leave

  Ms. LINDA T. SANCHEZ of California. Madam Speaker, I ask unanimous 
consent that all Members have 5 legislative days to revise and extend 
their remarks and include extraneous material on the bill under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from California?
  There was no objection.
  Ms. LINDA T. SANCHEZ of California. Madam Speaker, I yield myself 
such time as I may consume.
  I rise in strong support of H.R. 3678, the Internet Tax Freedom Act 
Amendments Act, as amended. H.R. 3678, legislation designed to extend 
the Internet tax moratorium and grandfather protections, clarify the 
treatment of gross receipts taxes, and revise the definition of 
Internet access is bipartisan legislation at its best. It has 
widespread support by industry groups including the Don't Tax Our Web 
Coalition, as well as by various government organizations such as the 
National Governors Association, the Federation of Tax Administrators, 
the National Conference of Mayors, and the National Conference of State 
Legislatures. It is supported by a wide range of labor and union 
groups, including the American Federation of State, County and 
Municipal Employees.
  And with that broad support, the House passed H.R. 3678 by a vote of 
405-2. H.R. 3678, as amended by the Senate, contains four distinct 
changes.
  First, the Senate version extends the moratorium on State and local 
taxes on Internet access and continues grandfather protections for 7 
years until November 1, 2014. The 7-year time frame will allow Congress 
to revisit the moratorium and consider developments in the States or in 
technology. It will provide businesses sufficient time to plan and 
ensure that consumers benefit from tax-free access to the Internet.
  Second, the Senate version extends from November 1, 2007 to June 30, 
2008 the time for certain States to adjust for a phaseout of the 
grandfather protection. This alteration will benefit State governments 
who would have scrambled to readjust their budgets with a loss of 
revenue beginning November 1.
  Third, the Senate version expands the definition of Internet access 
to prohibit taxation of certain services which are fee-based, not 
packaged with Internet access, and are offered from sources other than 
providers of Internet access.
  Finally, the Senate version prohibits a State from reimposing 
Internet access taxes if the State had eliminated the taxes more than 2 
years ago.
  For nearly 10 years, we have had the luxury of tax-free Internet 
access, as we have acted under a moratorium passed by Congress, but the 
moratorium expires in less than 2 days.

                              {time}  1030

  With the impending end of the moratorium in sight, this Chamber 
agreed nearly unanimously to pass H.R. 3678, the Internet Tax Freedom 
Act Amendments Act. This legislation is an example of how a bipartisan 
approach to a complex issue can serve the public good.
  While the Senate made some changes to H.R. 3678, this is a version 
I'm very proud to support. It retains the essence of H.R. 3678, 
including refining the definition of Internet access and, most 
importantly, providing a temporary extension of the moratorium. This 
legislation minimizes the effect on State and local government revenue, 
treats businesses fairly, and keeps Internet access affordable to 
consumers.
  I remind my colleagues on both sides of the aisle that the current 
Internet tax moratorium expires in about 36 hours. Madam Speaker, I 
encourage all my colleagues to join me in supporting H.R. 3678, the 
amended Internet Tax Freedom Act Amendments Act, so that tax-free 
access to the Internet can continue.
  Madam Speaker, I reserve the balance of my time.
  Mr. SMITH of Texas. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, I'm pleased that we are considering a bill to extend 
the Internet tax moratorium another 7 years. With only 2 days left 
until the moratorium expires, it's high time that Congress passes this 
important legislation and gets it to the President's desk for his 
signature.
  Two weeks ago, the House approved H.R. 3678, a bill to extend the 
Internet tax moratorium for 4 years. I supported

[[Page H12162]]

this legislation because it accomplished several positive things. For 
example, it clarified the definition of Internet access to ensure that 
States do not tax Internet access, including the acquisition of 
transmission capabilities.
  However, I was disappointed that it did not permanently ban taxes on 
Internet access and e-commerce and that the House Democratic leadership 
refused to allow a vote on permanency, even though over 240 Members are 
cosponsors of a permanent extension.
  Today, by passing H.R. 3678 with the Senate amendments, we are taking 
a step in the right direction. This legislation extends the moratorium 
for 7 years, almost doubling what the House approved only 2 weeks ago.
  The Senate amendments to H.R. 3678 also made several other important 
changes to the law. The Senate extended the coverage of the moratorium 
to all e-mail, regardless of whether it was bundled with Internet 
access. With respect to the original grandfathered States, the Senate 
added a new ``use it or lose it'' provision that says that if one of 
those States repeals or otherwise does not enforce its tax on Internet 
access, it loses its grandfather protections.
  I think these are good changes to the original House-passed bill, and 
I am happy to support them.
  By extending the ban on Internet access taxes for a longer period of 
time, we give businesses the certainty they need to spend billions of 
dollars to construct, maintain and update the broadband Internet 
infrastructure throughout the country.
  This legislation will help keep the cost of Internet access down so 
that all individuals can continue to use the great informational tool 
that is the Internet.
  While I'm disappointed that we're not making the ban permanent, which 
has wide support in the House, we are certainly moving in the right 
direction by passing H.R. 3678 today.
  Hundreds of companies and groups, including AOL, Apple, Americans for 
Tax Reform, AT&T, Comcast, eBay, Electronic Industries Alliance, Level 
3 Communications, the National Association of Manufacturers, National 
Cable and Telecommunications Association, National Taxpayers Union, 
Sprint/Nextel, Time Warner Communications, T-Mobile, U.S. Chamber of 
Commerce, U.S. Telecom Association, U.S. Internet Industry Association, 
Verizon, Yahoo, the Business Software Alliance, and the Hispanic 
Technology and Telecommunications Partnership, among many, many others, 
have, in fact, called for a permanent ban on Internet access taxes.
  While H.R. 3678 doesn't get us all the way to the goal line, it is a 
step forward that will benefit the economy and the consumer.
  Madam Speaker, if we are going to have a healthy economy in America, 
if we are going to continue to create jobs, if we're going to continue 
to enjoy a high standard of living, if we are going to continue to 
increase productivity, we have to do everything we can to encourage and 
help the high-tech industry.
  To that end, I support H.R. 3678, but I still would like to see 
Congress pass a permanent moratorium.
  Madam Speaker, I reserve the balance of my time.
  Ms. LINDA T. SANCHEZ of California. Madam Speaker, I yield 3\1/2\ 
minutes to the gentlelady from California, a colleague of mine who's 
very knowledgeable on Internet tax issues, Ms. Anna Eshoo.
  Ms. ESHOO. I thank the gentlewoman for yielding.
  Madam Speaker, I rise today in support of the amended legislation 
that's before us. Two weeks ago when the House brought legislation to 
the floor on Internet taxation, I was only one of two that opposed it. 
Now, I opposed it not because I opposed extending the moratorium. Quite 
to the contrary.
  I offered legislation with Mr. Goodlatte that would have made 
Internet taxation, a ban on it, permanent. We introduced legislation 
that enjoyed over 240 bipartisan cosponsors. That legislation was not 
considered by the Judiciary Committee or the House.
  The bill also contained a loophole that could have opened up the 
possibility of new taxes on the Internet services such as e-mail and 
music downloading. I knew we could do better and today we are.
  The Senate-amended legislation will establish the longest term for 
the Internet tax moratorium since it was first created in 1998. The 
Congress acted on that again in 2001 and 2004, and today's moratorium 
is the longest that will be adopted. So I think it's cause for 
celebration.
  The legislation will guarantee that new barriers created by taxation 
of Internet access and e-commerce will not emerge when the current 
moratorium ends, which is just, as the chairwoman said, 36 hours away. 
So we're coming in right under the wire.
  I think that this is very important policy for our country. Very 
importantly, this is going to continue to spur innovation, and it will 
advance our goal of broadband for everyone in the United States.
  I'm very, very pleased at the Senate action, under the leadership of 
really the father of this effort, Senator Ron Wyden, new father of 
twins, a son and a daughter, many congratulations to him. I urge all of 
my colleagues. This should be a 100 percent vote in the House for a 7-
year moratorium, and I thank the leadership for bringing it to the 
floor and the chairwoman for her leadership on this as well.
  Mr. SMITH of Texas. Madam Speaker, I yield 5 minutes to the gentleman 
from Virginia (Mr. Goodlatte), a senior member of the Judiciary 
Committee and the principal Republican sponsor of the permanent ban on 
Internet taxes.
  (Mr. GOODLATTE asked and was given permission to revise and extend 
his remarks.)
  Mr. GOODLATTE. I thank the gentleman from Texas for his leadership on 
this issue, as well as that of the two gentlewomen from California, 
Congresswoman Eshoo and Congresswoman Lofgren, who have been advocates 
of a permanent extension of this legislation.
  Madam Speaker, I am pleased that the House leadership has now seen 
fit to schedule a vote on a bill to extend the Internet tax moratorium 
for longer than the mere 4-year extension contained in the House-passed 
bill.
  However, I'm still extremely disappointed that the majority did not 
allow any amendments to H.R. 3678 when it was considered by the full 
House. The handling of that bill 2 weeks ago by the House leadership is 
unfortunately reflective of the stranglehold that leadership has placed 
on the will of the majority in this Congress.
  I had introduced legislation, along with Representative Eshoo, to 
make the ban on Internet access taxes permanent, and that legislation 
had garnered nearly 240 bipartisan cosponsors before the House was 
forced to vote on the 4-year extension. These cosponsors represent a 
strong bipartisan majority of the Members of this body. However, with 
absolutely no explanation, the majority party cut off all opportunity 
for amendments to that legislation on the House floor, where I have no 
doubt an amendment to make the ban on access taxes on the Internet 
permanent would have passed with a very strong majority.
  During committee consideration, the House Judiciary Committee even 
resorted to obscure procedural tactics to reverse a vote for an 
amendment in committee to extend the moratorium from 4 years to 8 
years. Because all but one Democrat, Congresswoman Lofgren, on the 
committee voted against an amendment I offered there to extend the 
moratorium for 6 years, I assume that to be consistent they will vote 
against the 7-year extension before us today, but we shall see.
  With regard to the merits of a 4-year extension, we heard arguments 
that the Senate would not accept anything longer than a 4-year 
extension. However, that has proven not to be the case. Now, House 
leadership has been forced to schedule a vote on a bill to extend the 
moratorium for 7 years because the current moratorium expires tomorrow. 
It's a shame they did not do this, and more, voluntarily when they had 
the chance.
  Instead, the Senate, and I, too, join in commending Senator Wyden and 
Senator Sununu in the bipartisan effort that was made in the Senate, 
which passed a more reasonable bill with a longer term of protection 
for American taxpayers.
  The bill before us today extends the moratorium for almost twice as 
long as

[[Page H12163]]

the House-passed bill, and while I would prefer a permanent ban, this 
is a vast improvement over current law. This bill will continue to help 
ensure that the digital divide does not grow between those who can and 
cannot afford broadband Internet access.
  The bill will also help ensure that businesses have more certainty 
when making business decisions about whether to deploy broadband to 
areas they do not currently serve, such as rural areas across the 
country.
  I urge the Members of this body to support this important 
legislation.
  Ms. LINDA T. SANCHEZ of California. Madam Speaker, at this time, I am 
pleased to yield 3 minutes to the gentlelady from California (Ms. Zoe 
Lofgren), a colleague of mine on the subcommittee and the Committee on 
the Judiciary.
  Ms. ZOE LOFGREN of California. Madam Speaker, I rise in support of 
H.R. 3678.
  In a welcome and refreshing instance of bipartisan, bicameral 
cooperation, the Senate took our bill and improved it. The longer 
moratorium means that service providers will have more certainty when 
deciding whether to make critical investments in basic infrastructure 
of the Internet.
  The 7-year extension is longer than any that has ever been approved 
by any previous Congress. Consideration of this bill today shows that 
the Democrats in the 110th Congress truly understand the importance of 
the Internet to our economy.
  Equally important, the bill as amended makes absolutely clear that 
Internet access embraces ancillary services such as e-mail, instant 
messaging and personal storage capacity. This change removes ambiguity 
with respect to these services, and thereby encourages robust 
competition among Internet service providers.
  And importantly, today is October 30. By passing the extension of the 
Internet tax moratorium with ample time for the President to sign the 
bill into law, we avoid the almost certain disruption that would attend 
any further delay. Failure to act would be a mistake and a step away 
from the pledges we made in the Innovation Agenda.
  I continue to believe that a permanent ban on the taxation of 
Internet access is important to maintaining and improving our place in 
the information economy.
  I remain a proud cosponsor of my friend Anna Eshoo's bill that would 
have made the moratorium permanent. I will continue to work with her 
and Mr. Goodlatte to achieve that goal, but I heartily accept H.R. 3678 
as a fair compromise between our position and the views of those who 
are reluctant to entirely abandon the possibility of one day taxing the 
Internet.
  Ultimately, we will reach the legislative conclusion that taxing the 
Internet is simply a bad idea. Fortunately, this bill buys us enough 
time to get there and is an important, big step in the right direction.
  Aside from supporting expansion of the broadband and innovation, it's 
also good news for American families that they will not face a new tax 
burden when they utilize the Internet come November 1. Therefore, I 
urge my colleagues to join me in supporting this important and very 
timely legislation.
  I thank the chairwoman of the subcommittee.
  Mr. SMITH of Texas. Madam Speaker, I yield 3 minutes to the gentleman 
from California (Mr. Campbell).
  Mr. CAMPBELL of California. I thank the gentleman from Texas for 
yielding.
  Let's make it clear what this bill does not do. What it does not do 
is it does not prohibit States or localities from putting general 
application taxes on Internet transactions as they would apply if that 
transaction were taking place not on the Internet. For example, it does 
not ban sales taxes on transactions over the Internet, as long as those 
taxes are the same sales taxes as would be applied if that purchase was 
transacted in a store or over a catalog, but what it does do is it says 
you cannot put discriminatory taxes on the Internet.

                              {time}  1045

  You cannot take that sales transaction and give it a sales tax that 
is higher because it was transacted over the Internet than if it were 
not. It also says that you cannot tax access or use to the Internet.
  Can you imagine, can anyone out there imagine that if every time you 
sent an e-mail there was a tax that went on your credit card or 
something for using it, or every time you went on a Web site, there was 
a tax? That's absolutely unconscionable. Particularly today, when we 
realize how much of the economic growth we have experienced in this 
decade has come from the Internet and how much distribution of 
knowledge there has been and how it is a great equalizer that so many 
people at so many incomes and in so many locations are able to access 
knowledge that was previously unavailable.
  The Internet has been a great engine for economic growth and for the 
distribution of knowledge. We don't want to slow down that engine by 
taxing it.
  Now I, like I believe every other speaker this morning, wishes that 
this bill were a permanent ban. I can't imagine a time when we would 
want to restrict your access to the Internet by taxing it.
  However, 4 years is better than zero, and 7 years is better than 4. 
So this 7-year extension is something that I will heartily support.
  However, I also desperately hope that before we get to the day of the 
expiration of this next 7-year period, that sometime within this 7 
years that this Congress realizes and recognizes once and for all that 
taxing the access to or use of the Internet is a bad idea and makes 
this ban permanent in the future.
  Ms. LINDA T. SANCHEZ of California. Madam Speaker, I reserve the 
balance of my time.
  Mr. SMITH of Texas. Madam Speaker, how much time remains on each 
side?
  The SPEAKER pro tempore. The gentleman from Texas has 10\1/2\ 
minutes, and the gentlewoman from California has 12 minutes.
  Mr. SMITH of Texas. Madam Speaker, I yield 5 minutes to the gentleman 
from Michigan (Mr. Upton) who is a senior member of the Energy and 
Commerce Committee and also ranking member of that committee's 
Subcommittee on Telecommunications and the Internet.
  Mr. UPTON. I thank the gentleman for allowing me to have a little bit 
of time this morning to talk about a very important issue.
  Madam Speaker, I am one of those Members of Congress who actually 
reads and signs all of his legislative mail from their district. I can 
remember not too long ago there was a write-in campaign to every 
congressional office complaining about a bill that Congressman Snell 
had introduced that was going to tax the Internet, every single piece 
of transaction that one might have on the Internet. Of course, as we 
know as we look at this board, and I have served in this Congress, I 
like to say not long enough, but I have never served with a Congressman 
Snell in the 21 years that Mr. Smith and I have served here together.
  I went through it to find out when did Congressman Snell serve? There 
must have been a Congressman Snell. Well, there was. He served in the 
64th Congress. Now, that was a long, long time ago, and I daresay it 
was before the Internet. It was before Al Gore invented the Internet, 
and it was before the Senate and the House discovered it as well.
  But can you imagine taxing every different thing that one might do on 
the Internet?
  I look at our own household here and back in Michigan. Often we come 
home, my wife and I, the first thing we do is we get on the Internet. 
We check what our daughters might be saying at college. Two nights ago 
I was doing some Internet surfing, and I got IMs from my daughter, 
probably about 20, 25. It was a wonderful experience that she and I had 
communicating. But can you imagine if there was a tax on every single 
IM message that came back and forth?
  A lot of us do our banking on the Internet, check our different 
accounts. Can you imagine every single time you are going to get a tax 
on the Internet? For me, I am a sports nut, my Wolverines. I was at 
MGoBlue last night a couple of different times. When is the Michigan-
Michigan State game going to be on this weekend? Can you imagine if you 
got taxed every time? I wanted to check if Michael Hart was going to 
play this Saturday. I checked a bunch of different Web sites. Can you

[[Page H12164]]

imagine if you got a tax every single time? That's just nuts.
  Thank goodness we are extending the current moratorium that otherwise 
expires this week. Now, I am one that wanted to make it a permanent 
extension. I join with Mr. Goodlatte and Mr. Smith and others as a 
cosponsor of legislation so that we don't have to do this every single 
year. We passed in the House a couple of weeks ago a bill that was 
unanimous, in fact, as I recall, that extended it for 4 years.
  The Senate finally did something right; they actually extended it 
beyond 4 years. We are going to see an extension for 7 years. Even 
though it's not permanent, 7 years is better than nothing, and that's 
what we are doing today.
  But as I think about all the different uses that we use on the 
Internet today, to think that we would tax every e-mail, every search 
of the Web, all those different things. As the former chairman of the 
Telecommunications Subcommittee, I know that this will stifle the 
growth of the Internet in a major, major way.
  I would ask all of my colleagues, Republican and Democrat, to support 
this extension. Let's get it to the President. I am sure that he will 
sign it, hopefully, before the week is out, so that we can no longer 
have the audacity to think that a Congressman Snell will come back and, 
in fact, perhaps introduce a piece of legislation that will, in fact, 
tax every Internet transaction. It would be disastrous.
  Ms. LINDA T. SANCHEZ of California. Madam Speaker, I reserve the 
balance of my time to close.
  Mr. SMITH of Texas. Madam Speaker, I have no further requests for 
time, and I yield back the balance of my time.
  Ms. LINDA T. SANCHEZ of California. Madam Speaker, H.R. 3678, as 
amended by the Senate, remains a strong bill that provides much-needed 
clarity to the communications and Internet industries and strikes an 
appropriate balance in addressing the needs of States and local 
governments while helping keep Internet access affordable. I urge my 
colleagues on both sides of the aisle to join me in supporting it.
  Mr. CHABOT. Madam Speaker, I rise in support of H.R. 3678, the 
Internet Tax Freedom Act Amendments Act, as amended by the Senate.
  The Internet has changed the way we communicate, learn, and do 
business--all for the better. Since the Internet tax moratorium was 
first adopted, tremendous investment, growth and innovation in the 
scope and use of the Internet has occurred. By preventing unnecessary 
taxation of the Internet, Congress has fostered growth in productivity, 
spurred innovation, and widened public access to information.
  This expansion is impressive. However, there is still more that 
Congress can do to ensure equal Internet access among all Americans. As 
I stated when the House passed its 4-year extension, permanently 
prohibiting unnecessary taxes, such as an Internet access, is the best 
course of action for accomplishing this goal.
  The surest way to stifle achievement, progress, and growth is to 
involve the government. I urge my colleagues to pass H.R. 3678's 7-year 
extension and use this time to work together to permanently extend the 
moratorium in order to foster the innovation and the free market that 
have been the formula for economic growth and prosperity.
  Mr. COLE of Oklahoma. Madam Speaker, though I would have voted 
``yea'' on the Internet Tax Freedom Act, it is not the vote I wished to 
have had. I along with 242 bi-partisan co-sponsors wanted to see the 
Internet Tax Moratorium made permanent instead of an extension for 7 
years. Through negotiations in the House, members were told that the 
Senate would never agree to anything longer than 4 years. Then, we were 
forced to vote on a 4-year extension October 16, without the 
opportunity to add amendments to lengthen the ban--or even make it 
permanent.
  Madam Speaker, today we are now voting on a Senate amendment to H.R. 
3678, extending the ban for 7 years--3 more years than what we were 
told the Senate would agree to. Imagine what we could have accomplished 
had the democrat leadership had listened to the will of 242 members 
from both sides of the aisle asking to make this ban permanent.
  Ms. LINDA T. SANCHEZ of California. Madam Speaker, I yield back the 
balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from California (Ms. Linda T. Sanchez) that the House 
suspend the rules and concur in the Senate amendment to the bill, H.R. 
3678.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. SMITH of Texas. Madam Speaker, on that I demand the yeas and 
nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

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