House OKs Internet Tax Freedom Act

By a nearly unanimous voice vote, the House approved the so-called Internet Tax Freedom Act, which would impose a three-year moratorium on new taxes for the global computer network. The Senate is expected to take up its version of the measure after its July 4 recess. The legislation aims to prevent up to 30,000 state and local governments from assessing their own taxes on Internet service providers and electronic commerce transactions, said Rep. Christopher Cox (R-Newport Beach), who co-sponsored the bill. The bill would also prevent the Federal Communications Commission from regulating the Internet, encourage foreign governments to keep the network free of taxes and require a study on the best way to implement taxes online. The original bill called for a lifetime ban on Internet taxes, but that was reduced to three years because of objections from governors and mayors, who view the new taxes as an important source of potential revenue. The Senate bill calls for a six-year moratorium on Internet taxes.